For those who have ever been in the situation on booting a month-to-month tenant to remodel unit and rent for more cash, this question/situation is for you :)I currently have a side studio to my single-family home that is being rented out for $700.

I have discussed with my partner (wife) about new leases after each "term" just to guarantee the income.I guess I'm mostly looking at the built in rent increase factor to forecast the future earnings and how to combat the dreaded increase in expenses.

(My understanding is that since Canada doesn't have a  tax law similar to a 1031 exchange and there would only be U.S. taxes paid on the boot, then if I was a Canadian resident at the time of the exchange, I would pay tax on the remaining gain in Canada.) 

Even though other markets may be better, the experience you gain if you have boots on the ground in your local market is a huge plus

There's many things that can go wrong and if you don't have boots on the floor it will become very stressful for you and you will have created a nightmare and maybe throw in the towel and never want to invest again.

You can adjust to your boots in the ground information and your teams return expectations.  

When I say experienced, I mean a pro with some miles on their boots.

(http://www.meetup.com/FIBI-Real-Estate-Pasadena).Non-Real Estate, but awesome business meetup is Casey Eberhart's Business Marketing Bootcamp (http://www.meetup.com/LA-Business-Marketing-Boot-C...) on the second Tuesday of the month. 

How does a new out of state investor “build a team” that can be “boots on the ground”?

I would start with getting some boots on the ground to help walk properties for you!