After spending hours trying to unclog the pipe, the technician told me that he has to replace the pipe for the amount of 4,200 dollars.

All the new drywall in the bathroom had to be replaced.

One thing to keep in mind is in a 1031 exchange is that you not only can diversify from one into several replacements like you're doing. 

If you have left over money then replace kitchen counter with granite.

Why don't you just sell the units and replace them with properties where this isn't a problem?

There is 1960's wall paper on the walls in the kitchen and the flooring needs to be replaced. 

Eventually, this would replace our current jobs.

Based on the photos of the home, I had thought it was a pretty easy rehab with simply replacing the water heater, paint, and some other cosmetic updates here are there.

If it's gas, you could remove it and replace with a gas fireplace, assuming the supplemental heat is required, Just a thought. 

Additionally you can have grandfathered items on old buildings that once they break even if they could be repaired the code says they have to be replaced and brought up to new standards.I know some investors that invest in student rentals.