they purchased the property to sell and that disallows it for 1031.The more proper way to do this would be to sell as yourselves and buy the replacement property as yourselves (letting your son help direct what you buy). 

I have no idea if Zillow is accurate or not but more modern homes in the neighborhood are selling for $200-$300k so it may be a good rough estimate as I haven't had it properly appraised yet.

You need it properly converted with permits to have it zoned as a living space (second unit) otherwise you will violate your insurance.

Hi David,This may be too late for you, but this is a common issue when laying tile over top of concrete if not done properly. 

If I go and add cells myself, I need to re-write the formulas for everything to flow properly.  

What is the proper procedure to follow if a tenant dies?

Thats because like most small businesses, they are not properly capitalized, and they dont know how to run a business.

Bona fide installment sale.

It is cost prohibitive to install 3 new heating systems to separate them out and put it on the tenant (my first choice.) 

Install separate electric hot water heaters.