It can be done ethically, but you need safeguards to confirm mortgage & possibly property tax payments made on-time, as well as insurance with you protected.- Also, you need a legal way to take back the deed if buyer defaults!

Not to mention the tax benefits it allows. 

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

I’d fix it up and list it to sell after I’d been there two years to take the gain tax free.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

Investors often obsess over how to defer tax obligations and ultimately make poor investments due to being hyper focused on taxes.

I have 2 options:- finance the construction pre-selling the apt, and take my profits (expected to be around 700K pre-tax); or- finance the construction with a 6-7%/year loan (collateral = my house), keep the 10 units, and once the building is completed in 24 months, rent them for circa 180K/ year gross.

You did purchase the property in one tax year and are selling it in another tax year which satisfies one of the court rulings. 

@Greg StrunakA good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.I recommend finding an accountant who specializes in real estate taxation, business taxation, financial planning and tax planning.You may want to consider working with your accountant remotely to expand your options.I would also recommend looking for a accountant willing to work with you throughout the year.