Eventually, I'd like to utilize a 1031 exchange to trade up into larger multifamily units.Thanks in advance for your insights!

She's asking me to manage the house for her in exchange for a $200 monthly fee (for example, I could list the house for $2700 and give her $2500).This would include finding tenants in the same way I do for my own tenants, and managing the property after it is rented as it is only 4 min away from my home.

What are the logistics for carrying out a 1031 exchange?

Without an influx in new construction we are probably going to stay on this path, because outside of 600k new construction in the suburbs, we only have what we have in terms of houses.Wisconsin is generally a landlord-friendly state, but Dane County (Madison) keeps getting more and more landlord-unfriendly, Milwaukee is definitively better in that regard.

Oh and listen to @Dave Foster, he knows a lot and was my go-to guy for the 1031 exchange we did! 

How can I help you achieve your goals in exchange for you helping me?)

If so,Have you considered renting and turning your current unit into a rental investment (enabling a 1031 exchange after 2 years of rental income) ?

I thought the whole exchange was odd since I told him from the beginning I wasn't even looking for funding at this time but he definitely wasn't legitimate. 

The process you are referring to is what we call a consolidation exchange, where you would sell multiple properties to buy a  larger property.

In exchange, the former homeowner lives in the home until their death rent-free.