I'm looking to do a 1031 exchange on both of them to trade up for a better cash-flowing properties ($500-$600k for one and $180-$210K for the other one). 

Guy, an interesting read, but I totally disagree that the solution is more government regulation or  oversight of rental properties - unless they are part of section 8 and are therefore offering a service in exchange for income.IMO, the answer to your question of "When would you know....." is more based on personal integrity and ethics than a hard or fast "model". 

In exchange for your help, I can share my top tips from how other real estate agents are solving their biggest pains once I’m complete.

What I would personally do, is to do a 1031 exchange and defer the tax consequences by buying multiple new properties. 

Since we would be using the money in the same manner could we use a 1031 exchange to defer the gain income tax ?

We are wanting to utilize a 1031 exchange to buy a duplex in an area (Tri-Cities, WA) that has much lower housing prices and a good rental market.

Professional lenders will want more sugar. in exchange for equity we provide liquidity and allow people to scale MUCH faster than they would normally be able to do.. and its a little cleaner for them than bringing in partners.. we are ( well we think we are professionals in the industry) were many partners may not have much experience and can be a real thorn if things don't work out the way THEY think it should.this is not for everyday deals.. these are bigger players do millions of dollars a year in business.. and or small builders that always have liquidity issues.  

I recently saw the tenant at a bbq restaurant and we exchanged pleasantries. 

The topic exchanges on here are great!!  

We then use the proceeds to 1031 exchange to several properties with a turnkey provider in other states outside of California. 3 states to be exact.I have a few questions (my CPA is on vacation that's why I'm asking here, I'll confirm with him after he is back)1.