You have to ask yourself if it's worth it,financially.Probate is not cheap and your share of the proceeds will be sharply reduced with all the attorney and court fees.Plus,the original lawyer will want money for defending the estate from the lawsuit (whatever the reason for the suit).It could take a year or two to fight the sister and in the end,the lawyers will eat up the money from the estate over time.Unless the house is worth at least $200,000 or more as is without major repairs and upgrades needed,I would seriously question whether fighting the druggie Aunt is worth 2 years of litigation and court appearances.It is just my opinion as someone who has suffered through probate,don't take it for the gospel.

All properties are owned in my name and husbands name but have an umbrella policy to reduce risk-no LLC.........thoughts?

remember the keyword here is "exchange", 1031 is just change/exchange/delaying tax.If one wants to reduce the tax , they could come up with "other solution" for example aggregating PAL.

Plus with real estate you typically use leverage (financing), which significantly reduces your risk and increases your ROI. 

The intention would be to perform title search prior to attending the auction to reduce liability.

Reducing your living costs will help you increase your investment capital.

That would reduce the market for the properties since fewer investors can get loans.

If we buy the Property now, do we need to contingently reduced the price for next one year rent discount.? 

The grass isn't trimmed back from the curb/sidewalk, shrubs overgrown, sometimes grass a foot high.Then when it snows you want your tenant to shovel and salt to reduce your liability?

If they had a $1200/mo rental, lost their job & got evicted, and found another job at a reduced salary, but the rent is only $800/mo, then it's something to definitely consider.