Well I'd love to hear more about how you structure it then to remove the fees and make it better than merely investing in equities in a Roth or something like that.

Would I be better off keep the two businesses separate?

A better solution would be to keep the funds in the account and invest into a syndication using a self directed IRA. 

I'm looking for a better way to scale this though.

That gives the tenants a better ability to handle the increases and you will be less likely to have empty units, that you will probably need to fix up, costing you more, and have at least a month of vacancy, which cuts into your income.

Do I still have time to start an exchange with a qualified intermediary or am I better off just paying the taxes?

Duplex is better choice. 

You may see it on paper, but the reality is it's going vanish.If you're comfortable house hacking, probably a better choice.

To get better terms, can you draft off the underlying low rate mortgage with a wrap/sub2 offering?  

This math will get better as you will have more beds in the house.