I did this with a recent home purchase to keep from depleting my cash reserves. 

I have enough saved up for a down payment of 20% but that would deplete the majority of my savings.

Some special investors/loan programs can accept YTD earnings with an audited P&L + Balance Sheet, however this is not as common (and often very expensive on your side to do).3) Addbacks generally consist of depreciation, depletion, amortization & casualty losses, business use of home, mileage, and a couple others.

Generally the answer is yes, unless you're running around making absurd offers, hoping to find someone asleep at the wheel here in this Seller's Market.But as a Mortgage Broker in FL, I see so many investors who unnecessarily sink a ton of their Capital into Dead Equity as a Cash Buyer.FYI- lenders don't like Cash Out refis after closing and often won't offer as high of a LTV as offered on the purchase loans.PLUS...and I see so many so called "experienced investors" whether buying in the 5m or 100k range, who sink all they got into a property and completely eliminate their access to the better loan terms via Asset Depletion / Assets For Income programs....HERE IS THE ALTERNATIVE...BEST OF BOTH Show the seller you have the ability to pay cash with a Bank letter, and can and will pay cash if needed, but you would prefer to finance the transaction.Most sellers, as long as there is a substantial good faith deposit and guaranty you have the ability and will pay cash if the financing falls through, will understand and allow a 30 day closing.Usually the only people that have an issue with this is the Realtors, who want to get paid quickly, the sellers are usually reasonable about the requests.   

Back to your original post, the reason 99% of the respondents would recommend 1031 is because they are not where you are in the investor life cycle, the risk/reward continuum, or the growth/depletion curve.

Usually, to cover a large CapEx item or to capitalize a depleted reserve fund.

Now they dont' have to deplete their retirement savings.Gifting the proprty to you does eliminate the capital gains tax on the sale of their home, but then they don't have the cash or the income from the property.  

Is the seller an individual or an entity that will likely be dissolved once the transaction is completed (or at least be depleted of assets)?

As maintenance reserve depletes, hold back profits to replenish.  

They're surely depleted after 2ish years of those.I got a lot of thoughts on the matter, but suffice to say I'm a touch worried about the future of the healthcare system.