We also asked the seller for a price reduction to make the numbers work but the seller declined so we backed out of the deal and had your earnest money returned to you.

Hello,I have money for one deal but can’t decide what is better, a duplex/triplex out of state (Maine probably) or rent my current primary residence, upgrade, rinse and repeat. 

First, learn about ways to make money last, set your aims, grasp house hacking, check if you're ready money-wise, do deep market checks, make friends with local home investors, agents, lenders, and those who manage properties, go deep into property details, and get to know the local home laws well.

This is a very legitimate deal and quick money for the gap lender.

Or money back if not working or if I find incorrect data?

There are so many ways to make money. 

You will still be much lower than  new build.And faster too, and as we all know  - 'time is money'....

I have looked into some of the rules and it appears that I could not defer this money to a 1031 because at one time this was my primary residence?  

It's great to have you here.Here are some recommendations for you:Find and connect with other BP members that are in your area: http://www.biggerpockets.com/m...Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/a...Read Beginner’s Guide: http://www.biggerpockets.com/r...Check out BP Money Podcast: https://www.biggerpockets.com/..Wishing you the best

If the surrounding area has a lot of tear down and rebuild or there’s no inexpensive way to renovate to make it more functional, likely not worth sinking much more money into it if most future buyers will just prefer to tear it down.