It's a fundamental concept used in commercial real estate. 

Whatever money has not been spent on replacement properties at that time comes back to you because there is no longer the opportunity to complete an exchange.To emphasize the importance of this concept to a QI you must understand that the way we treat one client procedurally is how the IRS would perceive we treat all clients. 

I’m also new to BP and RE investment so doing a lot of educating myself on the concepts, jargon, knowledge base.

Long term goal is to leave our current jobs to be free to focus on investing and have financial freedom.A) Use equity (HELOC) to purchase a run down property and apply the BRRRR concept for a buy and hold.

They say, " if you can't take the heat then stay away from the fire", in other words if you can't absorb the cost of doing business then you are in the wrong business, simple as that.This is why I can't stand all of the jerks selling people on the concept that people can do real estate with absolutely no money, no credit, and no experience. 

I appreciate your suggestion SteveI have to research more about the concept of maintaining the tax free gain under the 3 year mark.

My wife and I read Rich Dad, Poor Dad at the beginning of this year and completely agreed with his concepts and have been immersing ourselves in real estate and passive investing since then. 

This concept sounds very interesting.

It's often not as a straight forward concept as saying this title is "good" or "bad".

The entire concept of this should not dissuade you from investing in a certain state, and is typically only a problem in small and medium sized cities.Hope this helps.