Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

Hey @Sidney Duquette so I am not a fan of buying properties that can't perform with the hopes that it will build equity to offset the losses.

Who's gonna buy them?

The VA and Fha loans have been able to do it but their strict appraisal guidelines make it tough to buy the often older homes in my market in Virginia Beach / Norfolk Area. 

Once I get the homeowner to sign the assignment,  do you want to be the first option to review the numbers and possibly buy ?

BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

Things they did bad which I wish I had asked more information about:Never involved in the screening of tenantsThey recommended keys for cash by waiving the rent amount buy only collecting fees which they would get not meThe cost to evict is 750-950 yet other companies told me they will include eviction in the priceThe tenant didnt pay in full last month and I was the one calling out to them and asking questions then a few days later I get an email saying something happened with the tenant and they are investigating.You get passed from person to person every week or so.No one told me when the construction was complete and so the house was ready for a week and the post to zillow and other sites was not done.It took them another week to take pictures and then another week to upload it.I was paying 200 dollar a month electric bills while the house was vacant because they left the AC running in the empty property.

There's a few opportunities to buy quads, tris, and duplexes.

Many are buying properties, doing minimal renovations to keep their crews busy, and selling with small or zero profit margins.Cash buyers are a priority.

Buy - Rehab - Rent - that has been the bulk of the work.