Sounds like lower non qualified / qualified ratio is the way to reduce CGs and depreciation recap.Furthermore, 1 property is owned by my elderly mother and can future reduce CGs via step-up at passing (assuming current step-up tax law)Property 1 (CA Condo $800k FMV, $450k basis, 10 year owned as 2nd home, wife+I are owner)Rent 2 year in CA (24mo rule), 1031 to WA, rent 1 year before converting to primary residence for 5 year before sale.Is qualified use years 10 (2nd residence) + 5?

The right connections can help manage the rehab side and reduce some risk, especially if time is tight with a demanding job and young kids.For the single-family route, consider markets that have potential for both appreciation and cash flow, so you’re building equity over time even if it's a slower route to property number two.

Client reduced price and using Direct IRA financing.

The cost should be getting reduced significantly. 

Just focusing on reducing debt , I tutor chemistry which has been helping with finances.

But the risk caused by this, is that the safety cushion is reduced or completely eliminated, and a small problem can cause a catastrophic default on the debt.So, many of these aggressively structured deals have been heavily distressed.

Owner-occupying a small multi-family property is a smart move—you're reducing your own housing costs while building equity and generating rental income.

And the GFC where I had spectacular earning years right up to 2008.

Reality is most people earn income bi-weekly.

Figure out how to get this money, maybe you have well-off parents who can give it to you or you may have to earn it yourself.