I've made a decent living over my brief investing career in Austin, but I've warned many out of state investors to the same thing that @Jay Hinrichs mentioned, which is that we have no state income tax here, which means that our property taxes are astronomical to make up for it.If you live here, it's immaterial, but if you live in a state with income tax, you're essentially getting taxed twice (and yes, I'm aware of (some) of the complexities of cross-state earnings and how they're taxed).

Having the right broker support that aligns with what you are trying to achieve is essential.

At the moment, I am essentially writing out a business plan detailing the entire process so as to make the process as smooth as possible. 

They're essentially contributing the duplex to the partnership 

In the future if I keep adding to that portfolio of properties I could essentially use the equity in there to lend against. 

IRC § 1031 even addresses properties held for fewer than two years (only the periods during which the property was held are taken into account, unless it looks as though an individual is deliberately trying to “avoid the purpose” behind the code).The safe harbor, essentially, is something like that IF…1.

Also, it may be below market rent looking at a per foot basis, but try to get ahold of the revenues for that location.

So essentially, if you let the contract expire, you just lose your earnest money deposit?

After that, it's a commercial property and the value is based on the revenue it generates.

Any serious investor will want to see the full numbers - all expense assumptions and revenue assumptions.