If its your hometown get connected with investor groups ask a ton of questions before pulling the trigger. 

Saw on another blog references to " some real estate transactions can trigger the need for a 401k to file a tax return and pat taxes".Looking to use my solo401k to invest in real estate but want to avoid making a mistake.

Just be an expert at one thing at a time.I was in your situation for a long time and I never pulled the trigger until I moved to Des Moines-I can only recommend that you work hard to make connections (is there a REIA or Meetup there anymore-I used to go to the QC for them) and learn your market. 

If I use the line of credit to make improvements and then decide to sell and 1031 exchange the property into a new property can I use proceeds from the sale to pay off the line of credit without triggering a taxable event?

When you are closer to pulling the trigger, I would be happy to chat. 

I will take a step back and understand this first before I pull any triggers.

But before you pull the trigger, start looking for a place to reinvest the funds.

I.E, job loss, injury.

Then in 2016, prices went up more and I decided to pull the trigger anyways.

A transfer to an LLC will trigger the clause and should therefore be avoided even though banks are hesitant to ever foreclose as long as the note is being paid.