There were some red flags prior and I should have trusted my gut on those, $2500 lost. 

However, if you transfer the property to an S-Corp, you could potentially benefit from a step-up in basis while still qualifying for the Section 121 exclusion, though you would still owe depreciation recapture tax.If maximizing tax benefits is your goal, consider the following options:Selling before 2026 to claim the $250K/$500K exclusion while reducing taxable gains.Selling to an S-Corp to get a step-up in basis and claim the 121 exclusion, though depreciation recapture still applies.Keeping it as a rental and using cost segregation for depreciation but knowing that selling later will trigger recapture and capital gains taxes.1031 exchanging the rental property to defer taxes if you plan to reinvest in another investment property.Transferring to an SMLLC offers no tax benefit—only potential legal protection.

Owner occupied or investment loan?

Perhaps in a few months, a refi will help you pull out more of the invested capital.

Quote from @Kyle Kline: Hello,I am curious if anybody has experience using short note investing to raise funds for an investment property down payment.

Investment Info:Single-family residence other investment in Redmond.

Doing some back of the napkin math and listings on Redfin right now it doesn’t look like anything listed right now makes sense from an investment perspective.

Investment Info:Single-family residence buy & hold investment.

I live in Oregon, but invest in Arizona. 

I live and invest around Marquette.