Here in chicago LTR rents are way up since 2021 many 20-25% higher so those still work and I have not seen any decrease in demand on investment purchases. 

@Sailin Li I am in the Gig Harbor, WA area and the city council has passed a temporary ban (trying to make it permanent) against STR.

Assuming I purchase a house with the intent to fix and flip in a 6 month window, do the carrying costs I pay increase my cost basis, such that my taxable profit is decreased?

Yes, these savings were temporary but nevertheless valuable.

You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases.

Now that the lease is expiring soon ,the tenants are asking for a rent decrease because five people will move out.

I also know in the beginning mistakes will be made but I feel with a mentor through their experiences I can decrease the mistakes being made.

Since as inventory of rental options decrease, the demand for those that effectively operate as AirBnB's should theoretically increase. 

I suspect as rates continue to decrease terms will begin to improve and more buyers will re-enter the market/ be able to pull trapped equity out of their recently completed projects.

To expand on what @Michael Plaks stated - yes you most likely can do a 1031, the next question is you should be asking if you should do a 1031.It isn't free to do a 1031 - you don't want to spend $2k in fees to have a temporary deferral of what would have been $4k of tax.