Planning to keep solid cash reserves and not overleverage myself to have some flexibility should a downturn occur. 

This year I occurred a possible non business taxable income by borrowing ira money from another investor and flipping a house.  

-what are "worst case scenarios" with the conversion process, and how can you prevent those scenarios, or deal with them if they occur?

I've also heard that some cities just have more multis than others based on when development occurred and what the trends were at the time.

The challenge - now more so than ever- is getting the numbers to work due to the price appreciation that’s occurred.  

Well, for me personally, if the dollar is going to lose value (it won't in the short term but it most certainly will in the long term) I would 100% either hold onto real estate or sell to 1031 into something better; simply selling to hold cash is a bad idea, IMO, unless a strategy is involved such as hoping to buy on a dip (and that dip must occur prior to inflation). 

This structure gives the investor a chance to get out of the ARM with little or no penalties after year 2 (1% is almost negligible in most scenarios) and essentially gives a 3 year window to refi before any adjustments ever occur. 

For example, a DSCR of 1.25x would occur if the property earns $1,250 per month in rent and has $1,000 in PITIA (expense – or principal + interest + taxes + insurance + association dues).

This has occurred two summers in a row and I need a better diagnosis of the issue.

If so, you may have coverage (depending on what occured)