Quote from @Kevin Barry:  Not exactly sure how this would work to make sure we are taking advantage of the loss reported for our own personal taxes.Good news:Your understanding of the process is correct.

To give an update I've been in contact with the 3rd party company Obligo, which explained the process better but they will be deducting the $2000 from my account within the next few days to reimburse them for what they paid the management company.

There are a few companies which manage these types of investment accounts and can help navigate the setup process.

why not hire a professional PM

Most DSR lenders will require you to have some experience if you DIY manage, else hire a PMC.

Sit down with a 1031 Intermediary and have them explain process and timelines.  

Congrats on starting the process of getting licensed! 

We are new this process.

Set expectations on paper for maintenance and repair process.

They constantly "lost" emailed documents, dragging out the approval process.