House hack/live in flip on an FHA loan with a co-signer

[Colin Spivey]

I think I am correct on this, but there are a few stipulations that deviate my path from the normal. I am 18 years old and going to college about an hour away from where I live currently. I was going to be living on campus but they recently reduced their living quarters capacity to 50%. Thusly, I was able to convince my parents to help me out with a house hack. We are planning on doing an FHA loan, with me as the primary and my father as the non-resident co-signer. We are looking at 3 bed, 2 bath houses (most available in the target area and our price range) and I plan to rent out all three rooms and make a makeshift bedroom in the living room aka house hacking it. I plan to live in it for at least two years, so between appreciation (hopefully) and some cosmetic fix ups that I plan to do myself, I am hoping to be able to do a live in flip and avoid paying capital gains taxes on the profits. My question is, if my father is co-signing and bringing the down payment (which I plan to pay him off completely within the next year), will I have any problems with avoiding capital gains taxes since he won't be living there or will it just be focused on me? Like I said at the beginning, I would think it all will work as normal, but I thought I would consult some of you tax experts. Let me know what you all think! Thanks!