@Mike SmithHey Mike, congrats on paying off that rental and great strategy to avoid taxes on it, and Dave hit on some really good points above.From the 1031 side, the biggest thing (and I think I saw someone else mention it above) is just making sure you’re working with a solid qualified intermediary and that your replacement property (or properties) are identified correctly.

Screening carefully is key to avoid last-minute cancellations.

If you want to avoid tenants, flipping is the obvious path, but the risk part is all in the purchase price.I usually suggest you look for a safety net deal, something that works as a flip, but would still cash flow as a rental if the market shifts during your reno.

Winter isn’t the season to gamble with rent numbers — it’s the season to stay competitive and avoid costly downtime.If anyone’s dealing with a winter turn right now and wants a second set of eyes on pricing or comps, happy to help.

We schedule trades back-to-back and pre-order materials to avoid delays.5) Lock pricing earlyFixed bids with subs and suppliers protect you from material and labor swings mid-build.6) Plan your exit before breaking groundWe comp resale value, rental value, and refi options upfront.

There are a couple red flags so you could chat with a couple other PM's, avoid getting into leases if you are unhappy with the PM.Not justifying the PM but playing devils advocate on a couple things you said - 1) Many times you might think the unit is rent ready but there could be misc. things to do.

What is the best way to avoid legal issues when making decisions for this property and to not let him claim anything when selling the property?

You asked what would be the best approach to get started and what if anything one would do differently looking back.First, congratulations, and I would look at getting a HELOC on your current house if you have equity or putting aside money in a consistent and disciplined way to fund the down payment and a reserve for your first investment.You could look around for a value add duplex by you but you can pick them up in good markets in Michigan for $150,000 plus or minus to give you an idea of what is possible.We strongly encourage you to work with a property manager from the beginning as they should help you make money and you have other things to do like look for your next investment and your family.Something I would have done differently is avoided buying single-family rentals as they turn into a financial alligator pretty quick when they become vacant.We help investors do this in Michigan and have local partners in the markets our investors are interested in.To Your Success!

From a liability standpoint, it usually makes more sense to reorganize and isolate the commercial building into its own LLC, with its own insurance rather than dissolving everything or changing ownership just to avoid a partnership return. 

Proper tax planning often avoids this "rush", ensuring clients understand the impact of their investments.