if so, I think its understandable to take a deposit. that being said, it should be held only for a year or two not indefinitely.

He really doesn't have the money to keep up with the home payments and live the life he wants.He's agreed that the property is mine if I assume the liabilities on the property and allow him to continue to live there indefinitely.

There are soooo many factors that influence your true ROI in real estate that I think it is really difficult for a person (especially me) to get a true accurate ROI - Cash flow is only one small part -- appreciation, debt reduction, tax benefits etc all add up in a way that makes real estate seem like the superhero investment and the stock market is the evil villain ---What if you could invest in a stock that pays a 1% monthly dividend, while appreciating steadily.... and on top of that, you can buy $100,000 in retail stock for $20,000 cash and an $80,000 loan --- AND someone else will agree to pay the loan back for you--- BUT, you don't have to buy at retail, you can frequently buy at a 20-30% discount from retail... although you make money every year on the stock, your tax return shows a loss---- and you can repeatedly buy stock on these terms indefinitely.  

If it's "over" then you don't qualify - all or nothing.Your two options would be - move back in (sounds like that's a nonstarter and then you'll have conversion issues and prorations of tax free gain).Or you could do a 1031 exchange and defer the tax indefinitely by following the process and purchasing more investment real estate.

Virtually eliminates Oregon’s no-cause eviction law;Imposes possible rent control Requires all fixed-term tenancies to continue indefinitely, solely at the discretion of the tenant;Requires landlords to pay for evicted tenants to move; andAllows tenants one year to file a complaint for any violation of the bill with 3-months rent + damages due to the tenant.If you live in Oregon, this is worth looking over.  

So  you can actually live in it for 2 and then move out and rent for 3 more (paying very close attention to dates), sell and still take advantage of that part of the code with the exception that you will have to recapture depreciation on the time it was a rental.If you go past the 3 year rental mark you can either sell and do a 1031 exchange which defers the tax indefinitely, or you could move back in.  

Sridhar Ramakrishnan there is a way that you can sell all your peripheries, defer all your capital gains taxes indefinitely if you’d like.

My wife and I are at a place where we are trying to find properties in the Cobb/Cherokee (specifically Kennesaw and Marietta) areas that we can purchase with cash and hold indefinitely.

Or as I call them, greater fools.Your entire argument is that since these areas have appreciated in the past, outpacing local incomes, they will continue to do so, indefinitely.

But if the mortgage company has "lost" the property you could rent it indefinitely as long as you paid taxes and condo fees.