The way a 1031 exchange works tax wise in the simplest fashion, is your initial basis in the original property you sell becomes your basis in the new property.

These are everyday experiences.If you borrow equity from your primary home and the investment fails, you risk losing your primary home.

Lastly, the safe harbor for small taxpayers allows you to deduct expenses under a threshold of 2% of the adjusted basis of the property up to 10k. 

Only way I will lock myself into 1 is if the exit fees are not prohibitive and % basis points is within acceptable ask price from the present lending rates, can surely go in for a higher deposit to tilt the balance towards positive cashflow i.e 25%-35%.

If you want to figure out the value logically, you can create a spreadsheet that will show your cost of financing and principle paydown on an annual basis to figure out the break-even date between the seller-financing price vs paying market price, but with bank financing.You mentioned a 40-year term, but is there a balloon?

Once a couple of flips have been completed together and we have built that relationship, we typically just go to a 50 upfront 50 at completion type of deal more typical with homeowner work (Not required, but its usually easier for both sides or we just continue a pay as we go basis).

The only items affecting capital gains are basis and expenses of sale. 

By asking for the break outs it'll give you a few ways to compare numbers on a comparable basis.

Mindset is key and just know that this is a business and you would be actively seeking clients and every day you wake up your working for the paycheck you receive in 30-60 days.

They put 100k here plus here and there over dozens of deals and hope the portfolio average stays positive over time.I know I deal with very wealthy people on a daily basis and have talked to thousands of millionaires over the phone through the decades.