I'm considering the purchase of a large home and converting it into a 4 or 5plex for Senior Independent Living with some amenities.

I am risk averse and if I were to purchase, I would tear down to the studs and do a full rehab {this would include getting rid of asbestos shingles and insulation).1) I have done a ton of research and it appears as if getting rid of asbestos is very DIY able assuming you spend money on the safety equipment and use it properly. 

If this is the case then I don’t owe capital gain taxes because I paid more to purchase and renovate the LA property than what I didn’t spend in the 1031 exchange?

For 2024, I will have a significantly higher W-2 income (600k) due to unplanned stock option income (company I work for was purchased). 

Also people who make money by having people purchase STRs have vested interest in under representing the associated risks.  

Purchase price: $151,000 Cash invested: $60,000 Last year I bought my first investment property, a duplex with 2 bed/ 1 bath in each unit.

You can move on from there and purchase a SFH if you don't like sharing a MF. 

Okay, so you specifically want arbitrage instead of to purchase something?  

When trying to do the deal analysis on my current property, it’s asking for the purchasing and closing costs.

And the IRS requires that all of the proceeds from the sale be used in the purchase of their new property.