Some cities are very strict.

While there is no strict time requirement for transferring ownership after a 1031 exchange, the IRS does consider the intent behind the transfer.

It may seem strict, but we are covering costs associated with what tenants leave behind.

It's a portfolio loan they underwrite and hold in house & have strict credit/DTI requirements (as they should) since they can leverage up to 95% on pure investment properties. 

I routinely am able to get 25%+ ROI

Thoughts on why you (or anyone else) like to be more strict on that versus income? 

Speaking strictly for Texas and properties on the MLS.

As a Cap Rate is indicative of the risk involved in owning the property, you want to focus on doing things that make your investment less risky if a bank ever had to take over.You can make your investment less risky by doing some of the following things:- Convert all month-to-month tenants to annual leases- Implement strict minimum rental criteria- Add security cameras- Make large capital and preventative improvements (fix drainage issues, install water pressure regulators, replace old HVACs...you get the picture)- Essentially, prove with action that you are caring for the property on a long-term basisThe only way this is effective is if you document everything you are doing as well.

q2: Is the capital gains rules on living together the last 5 years strict.

Remember that the IRS has strict rules regarding SDIRAs, and any violation of these rules could result in penalties and adverse tax consequences.