The eligibility matrix shows a distinction between 1, 2 and 3-4 units right?  

The key is that each tax payer purchase at least as much investment real estate as they sell.However you configure the sales (and each sale is a separate distinct exchange) does not matter as long as you take title to at least as much real estate as you sold in order to defer all tax.  

If she is the perfect tenant except she is (Age/Sex/Race/Religion/Familial status/sexual orientation) then well you are simply discriminating.

I realize many people have their properties set up as a distinct/separate entities, LLCs, etc.

At age 70, they are still working.Without the mindset and knowledge of what it means to invest wisely and have passive streams of income, hard work is wasted.   

It does however become more difficult.Yes you made the age old major mistake in the beginning as every new landlord does of fall into the trap of trying to please their tenants and be the "good' landlord.

I mean they both have the same or similar amount of bedrooms, bathrooms, age, sq ft, under a mile radius, etc.

We're about the same age, and feel the same way.  

What I was good at was running a business, I started my own at the very young age of 19, and what I did have was the desire and determination to succeed at my new goal at that time - real estate.Start small and flip a house.

(adult being an important distinction, I didn't get allowance when I was a kid, ugh) I'm thinking what I can do is let my sister list it, have her figure out what market value is so I don't have any family battles over fair value and her time renovating it.