You could end up with multiple inspections being done before even going under contract, inconveniencing the sellers and potentially causing property damage from invasive inspectors, hurting the listing and keeping the property on the market longer while the issues are resolved.

@Olivia SvrchekBeing mixed-use in itself isn't usually the issue. 

The issue is due to the floorplan, I am having issues having an idea on how to reorganize the kitchen.Does anyone know or recommend an interior renovation design that could provide a design idea?

Next issue, I know we had BP members who taught real estate at state approved schools, that would have qualified, but what  tossed them out of the ring was they also taught beyond their qualifications, such as in finance and got it wrong!

Has anyone else experienced issues when purchasing properties after foreclosure? 

This is very common in California.

The main issue that I have is that the tenant has 2 more years left on the lease and in order for me to fix all the mess in the basement I would have to remove tenant. all plumbing, electrical and structural is potentially dangerous.How do I manage repairs if tenant doesn't want to move?

Of course, there is an issue of where do you live for that period of time to establish that you 1031'ed into another investment property...I agree with @Michael Plaks, I don't know how you figured that savings...As for "...harder to sell to potential buyers," the 1031 transaction is mostly transparent to them. 

@Srini Murthy hopefully it is a non-issue if you pursue this property!

Would there be there any issue with me simply modifying the notice to quit forms to fit the lengths of time stated (30 days and 10 days) in their lease?