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.

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.

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

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

@Andrey ShostakA tax calculator would be nice.

Typically its done for open space or use for community property (ie. fire station location or other county use) and typicaly would assist in increasing tax base.  

@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.

Thanks.Hi Courtney,BiggerPockets Pro members get access to all Stessa core (free tier) functionality – plus unlock exclusive access to advanced features, like unlimited portfolios and Schedule of Real Estate Owned (SREO), all at no additional cost.BiggerPockets Pro members have free access to all Stessa’s featured benefits as well as advanced features, like unlimited portfolios and Schedule of Real Estate Owned (SREO) – giving Pro members exclusive value not offered to Stessa Free members.Simplify tax time and help maximize deductions Organize financial data and accountingEasily track key property metrics to optimize and boost ROI. 

I would recommend an STR for the best tax benefits and cash flow no doubt.