I defer to your expertise here. 

You can indefinitely defer the tax and use it to purchase nicer property/properties, as well as not have to recapture any depreciation.

The total value (purchase price + improvements) must meet or exceed the relinquished property’s value to defer all taxes.

And how much deferred maintenance does the property have? 

Your sibling can use a 1031 exchange to defer capital gains taxes on the sale of the rental properties by reinvesting the proceeds into like-kind investment properties.

As a side note typically I do not use my deferred tax dollars to invest in traditional real estate as the benefits (depreciation etc) are all lost when using a self directed IRA - My guess is build to rent will provide little to no cash flow to build the account - it will all be locked in the property. 

Some of our clients in MN have several properties and live in another country, so it is possible.On the investment side, the deferred maintenance (roof, flooring) will eat away at your equity/appreciation; but, you have a property that cash flows.

., commissions, fees) and consider a 1031 exchange to defer gains by reinvesting in another property.This post does not create a CPA-Client relationship.

There might be some negotiation room for you to adjust the taking of proceeds so that you end up the the real estate (and deferred tax) in a 1031. 

Is there significant deferred maintenance?