Model both and see which model performs better.

If the builder never transferred title, they might try to argue that its comparable to selling a model home within a new construction developement (new home, but has had thousands of folks walking in and out for months...sometimes years).I would be confused as to why someone would offer it as new construction when it had been lived in unless their aim is to avoid capital gains, but you say lived in a few months and not two years so that does not track.

You don't know how many times I coul get conventional loan in this way.In my case, my actual DTI is very low, but the way the gov calculated the income is so 1990-style that it doesn't reflect our true buying power.

Our specific model is buy, rehab, rent for at least one year. 

@Christian Styles, I appreciate the conformation to my exact thoughts👍🏻.

Seems that I need to buy the 14 inch rough in toilets (which is hard, because only few models are available at Home Depot and Lowes, since this is a non-standard size).

It is getting quite a bit easier to do this and I am working on a new business model to allow promoters to do their own portal while operating as a small part of a bigger network.  

But even if not, the real world application of understanding business may be of help in real estate style business albeit not required by any stretch.

And for sure sellers should basically never do them unless they are going to lose the property and they will get some equity by doing it and their credit is already trashed.. this was the model that i ran for all my sub 2 when foreclosure rescue sub 2 was legal in OR and WA. big times laws now..

The appreciation models only 3%-4% for SSF which is normal for 1 mil avg houses.Do not do ADU stuffs.