She is not married so her capital gains exclusion is only $250k. 

My goal is to leverage that equity for additional income.

The insurance payout also impacts your taxable gain.

Yes, any cash you take out of a 1031 exchange that isn’t reinvested into a like-kind property is considered “boot” and is subject to capital gains tax.

Account ClosedAdding your property manager as "additional insured" is standard practice and beneficial for you.

That will put us into the long term capital gains category on the sale. 

The only reason you’d consider a 1031 is if you have more than $250k in gains (if single) or $500k in gains (if married.).

Additionally, I would like to attempt to do the process Owner/Builder with subcontracting work out as well as doing some of the work I'm comfortable with (I have some experience with bathroom & kitchen remodeling an am not new to the construction industry).

Good Morning,I am a former Claims Specialist with the Social Security Administration and currently unemployed homeowner who is looking for guidance on how to gain property management experience here in the Central Coast of California.My wife is the only one working at the moment, so times are tough to say the least.We're looking to rent out a portion of our home in order to save up enough money to purchase our second home (or multi-family unit), rent that out, and begin to expand our portfolio. 

If you paid under $230k, you’d save $30k in federal capital gains taxes and maybe another $15k or more in state income taxes.