Best advise right now is just to ensure you have a solid team in place.

To ensure that you do not have actual or constructive receipt of the funds and to document the transactions specifically according to the 1031 regs.Your scenario isn't that unusual. 

Immediate problem is getting a few bids to ensure your contractor isn't pulling one over on you.

Discuss your and your partner(s) long term goals to ensure alignment.

Reaching out to find that information that will ensure I'm on the right path. 

And what can I do to ensure the safety of my property while I’m away

We have some questions for him but I thought I would ask everyone what they think is important to discuss with him to ensure we have an agent that will be helpful to us in our search.

Ensure you get a paperwork from the bank that the shortsale payoff is indeed the shortsale payoff and have it signed and received prior to closing.

From what you described, it sounds like the property could be considered a condotel and most likely is ineligible for conventional financing per FNMA or FHMLC.There are fixed rate options but ensure to compare to current ARM and see if it makes sense to refi  ARM is not a bad or risky loan, so long as you understand it’s components, i.e. caps, frequency of adjustment, index that it’s tied to, and the margin.

That is up to the investor's discretion.Having set up thousands of these and carrying out many conversations of this nature with investors and lenders I ensure you that it works.