You can easily wash, rinse, repeat this tax strategy and never pay tax on your gain or the value if your labor embedded in the value of the house.

I never had any contact with her and she was in the wind.I got to know a banker at a branch office, explained the situation, and told him that all I wanted to know was how much the loan payment was. He

Imagine turning on 9 AC's full blast just to wash one plate.

(We did this to keep our debt ratios down, intent was he would get a loan on another property down the road, but he got sick and stopped expanding our partnership) He and his wife had to sign an agreement to encumber the property, but they are not on the mortgage document or on the mortgage in any way.

Why does she want it power washed?  

My suggestion of substituting it with the washing machine which was not included in the sale was nixed that the seller needs it and "this is just part of short sale downsides." 

With that said, paying the taxes might end up being a wash or cheaper after all said and done, and you don't have the constraint to identifying replacement properties in 45 days and closing in 180 days. 

I am a lifelong resident in the Balt/Wash area having growing up in Baltimore and now living in AA County. 

In addition, we bring our pressure washer and lawn tools, plan on pressure washing siding & treating/repairing decks and fences, painting outside doors & trim, cleaning dryer vents, re-caulk around tubs, etc., all the things that tenants never mention as it doesn't affect their lives but will cost us a lot if the PM does it and even more in the long run if it's neglected.    

I've seen far more damage done to properties by people who let their kids run wild, or who mess with plumbing or electrical issues in blissful ignorance, than I have seen done by neglecting to clean a range or wash a floor.