Too many people on both sides of the aisle that have utilized the 1031, which as you know just turned 100 years old. 

Rents in the area continue to rise and home prices have had double digit growth for nearly 3 years (97405 zip code).

Insurance, Principle payments, interest, utilities, wages, maintenance, prop mgmt, vacancy, taxesAm I forgetting anything? 

That way you could utilize a low down payment conventional loan, and then refinance out of your FHA when you hit that 20% equity mark in the future!

I want to make sure I am utilizing as many tax benefits as possible.

It doesn't seem right that I'd have to just take it in good faith that they'll submit the claim on my behalf after they've already been made whole.Additionally, I've prorated the rent/utilities for the full number of days they were out of the premises.

Currently, only thinking about Insurance, snow plowing, mowing, taxes, and utilities.

You're approach is very sensible, I will utilize it.

You could even utilize a hard money loan instead and have your friend cover the down payment and interest payments, while paying him interest over the term of his loan or at the end of the project.

COC returns for both are double digits as well from my experience as well.