1031 Exchange, Section 121, any other tax strategies?

[Nicholas Hamel]

I purchased a single family in May '17 as my primary residence shortly before listening to BP podcasts and researching real estate. While I love the home, I have since realized my mistake and shudder when I think of the things Grant Cardone would say to me. I am interested in selling my house and purchasing an owner occupied multifamily but I am hesitant as I just paid $7k closing costs, will have somewhere around $7-10K closing costs on the multi and will pay a 4% agent fee for the sale of my residence. I am fine eating a few thousand up front to benefit in the long run, but will still need to sell my house for a profit (let's ignore whether or not I can get X dollars above what I paid just 6 months ago). On top of the expenses I already listed I would like to avoid capital gains taxes on the sale.  My questions are below:

1). I do not believe I qualify for Section 121 as I have not had any life changes that would fall under this category - they all seem like they are beyond one's control. Does anyone have experience getting creative with these guidelines?

2). My understanding of the 1031 Exchange is that a single family can qualify as long as there is proof that it is an "investment property". A family member is going to be renting a room starting in 2018, what do I need to do in terms of paperwork/documentation, and how long do I need to rent it before I can show intent that it is an investment property?

3). Are there any other strategies that may allow me to avoid capital gains taxes?

Thank you!

Nick