You said you can't sell now, but want to wait for the equity gain.

Some may have very small thresholds for repair holdbacks on purchases but this is typically limited to make ready items not to exceed $2,500 in costs to cure.

@Matthew Drouin had a great reply:"Typically 50% of revenue is going to go right to operating expenses on small multi family. 

Bureau of Labor Statistics (BLS) confirms Texas added the most jobs in the nation from December 2023 to December 2024 with a gain of 284,200 nonfarm jobs, significantly ahead of all other states.

As a new fix and flip investor lenders will typically want to see 20% down payment and will be able to fund 20% of the rehab budget (80% LTC). 

Did the proceeds from the sale count as short term or long term capital gains?

I would keep it in a high interest bank account might as well earn as much gain as you can no matter how small it is.However I think some debt pay down would be great not to the point where you are not liquid enough to Jump at another opportunity or can’t make a major repair when it arise.

You have to pay depreciation recapture and gains on the pro-rated time it was a rental.

-------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

They will get in touch with the property manager, let them know a complaint is filed, and typically give them an opportunity to make things right before opening an investigation.Have your friend look for a new PM immediately.Start by going to www.narpm.org to search their directory of managers.