That will boost my Cash ROI to 10% and will break even after 7-8 yrs. 

But the jist is that your old property is worth more than the property you want to buy and you want to use 1031 proceeds to boost the value of the new property so you can exchange equal or up from the old into the new property.The mechanism is that the qualified intermediary forms a holding entity called the exchange accommodating title holder.  

Moral of the story? 

The moral of the story is not to sit and put your head in the sand.

Hi Austin, Sub2 = you get the deed, you pay PITI, give your word, the promise to pay is not legally binding, it is a moral promise, loan can be called if payment is not paid or mortgage co finds out title has been changed, you own it and can resell it for cash or rent it out or lease to own.Wrap = you get ownership but not a Warranty Deed, It is called a AITD or all inclusive trust deed or mortgage, you pay PITI, directly to seller or note servicing co, loan can be called if payment is not paid or mortgage co finds out title has been changed, you own it and can resell it for cash or rent it out or lease to own.I always do not plan to own a sub2 or wrap long.5 year Private Lender Mortgages for long term hold and rents.There have been promoters of sub2 and exit on a wrap, or wrap and wrap again (double wrap) , I would NEVER do that.You need a GREAT attorney.

I seriously doubt your morality police are any worse that the regime I operate under.

I would suspect a fair few of you would not mind having a turn key property on your hands with plenty of upside value add still available in it on day one.I do agree with the comments about how the moral aspect of the renters is questionable at best, for now, I am thinking about the best mutually beneficial arrangements for both parties.BTW: One other detail... my cash invested will be covered in 5 years if the current renters stay and I don't raise the rent.

Moral of the story: do your own inspections.  

Do your own due diligence, is the moral to this story.  

Also, it would be difficult for me morally to start an enviction process during that time.