We have substantial closing costs on the sale, primarily transfer tax and realtors' commissions.

You simply add up the “net sale price” (after removing selling COSTS, the mortgage isn’t a cost.) that how much you have to buy to avoid paying any taxes.

@Steve Boss,  Here's a BP blog we wrote recently on costs nationwide - https://www.biggerpockets.com/blog/how-much-does-a-1031-exchange-cost.Just because an exchange is cheap doesn't make it bad. 

➡️ What are the estimated costs of upgrades for the semi-upgraded and fully upgraded units?

I'm getting somewhere in the ballpark of $14ish per sq ft per year for (what I estimate to be) C+ office space. 

Down payments are still standard for FHA or conventional (3.5% of the total cost, purchase+construction) and rates are on par with standard FHA rates. 

As soon as the house is built, I want to start a new build on this lot to sell as a spec house, budgeting approx $450k build cost, sale price is estimated $750k, supported by comps.

And most tenants will not hire a pro painter, but just do it themselves.....Not priming over old trim, sloppy paint, drips, etc...will just cost you much more to fix when they move out.Using a Licensed or professional painter that they pay for would be a different matter, then I wouldn't mind.

Corporate travel, divorce, etc. are other potential tenants.If costs in your market allow, I would encourage a duplex purchase vs SF...potentially 2 income streams vs 1 would help offset the extra cost of a duplex.  

Plus there would be closing costs again.We are open minded about solutions.