There are many benefits associated with a 721 Exchange.

That being said, there are some significant benefits to building versus buying and rehabbing.1) If you're building, you should be able to come in at 80% LTV or better assuming you're acting as the GC. 

Depreciation is going to still be offsetting cash flow quite a bit - when you accelerate depreciation, it doesn't technically do absolutely every depreciation item in year one, so there still is going to be quite a bit of depreciation to offset your cash flow.On top of all of this, the tax benefits largely are going to come in year one to offset your income.

I'd give the current PMC the benefit of the doubt and assume they are just trying to do this by the books as opposed to dragging their feet, but otherwise agree with @Theresa Harris.

The investor must consider whether the potential property value increase or other benefits outweigh this loss.

With the luck of the market, I benefited and realized that real estate is what I would like to do long term.

Lots of people acquired their RE license during this period as it was a unique market that they thought could leverage to benefit them financially.

Instead of leaving equity tied up in the property, you can refinance and put that money to work on your next investment.Advantages:Leverage: You’re using borrowed money to increase your purchasing power.Long-term Wealth: By holding rental properties, you benefit from appreciation, passive income, and tax advantages.Scalability: The ability to keep reinvesting capital makes it easier to scale compared to traditional buy-and-hold methods.Is BRRR Right for You?

(My assumption is it may be tough to prove enough material participation if using someone local to manage.)Two things worth noting:1- I'll be discussing with my CPA in-depth soon, but would like to hear other's experiences on this.2 - The main reasons I'm looking to STR's is the tax benefits (Cost-Seg) & appreciation that comes with buying in these areas opposed to the mid-west where I look for long-term rentals..

This approach allows me to structure deals that benefit all parties involved and unlock unique opportunities in the market.I'm eager to connect with fellow investors, share insights, and explore new opportunities together.