If you want to sell it as separate townhomes in the future, you might want to make sure the unit separations are correct fire rated and maybe do some of this work with the pop top. 

Can you get everything in accordingly and correctly?

In order for my strategy to work though, I need to be able to secure the correct first deal: Value add 5-Unit under $500kThe goal would be to force appreciation, elevate cap rate, and flip the building to another investor.

I hope I am explaining this correctly. 

This is a good question and as others have indicated, there is no correct, universal answer. 

And you’re correct, the exemptions apply to owner occupants of the property, not to investors.

I'm sure some of the 1031 facilitators on here will correct me if I'm wrong and amplify what I say if I'm right.I'm pretty sure that the title of the acquired property will have to be in EXACTLY the same name as the title on the sold property.

Am I understanding the model correctly?

On the residential REI side, I think I need a correction to get me back in the right mind set;) 

@Jay Hinrichs - I am guessing the bank would do this for first liens only, correct?