My plan is use the equity short term and paying it off as move it from one investment to another.

It has been listed for a couple of months now and not selling and here is what I know:It was purchased in 4 or 5 months ago as a short sale for 150kThe owner put mayyybe 15K into fixing a few things like electric, the porch, etc.

My wife is a licensed real estate agent, and I will be testing for my license here shortly.

The holding period for the property is deemed long term.

Banks won't allow you to wholesale the property and I believe they require a seasoning period before you resell the property.

We did some improvements like opening the kitchen to the living room earlier on our short 3 years of ownership.

You'll certainly get to deduct the $20k but probably only some now and most of it over a period of time.

@Jeremy Cohen,Double close ( A -> B -> C ) is illegal in most areas these days, thanks to it being so badly abused by short-sale flippers (I won't name names).You will probably need to to do two closings back-to-back: A -> B, B-> C.

They want to know that you really can close in a very short time frame and that you have the necessary funds.

With such a short notice it is a big hassle to arrange the painter and short notice to the tenants.