I like the process and plan to ramp this up with 2-3 more before I retire in a 2-3 years.Round 1Retire from my current job.Relocate to be near my son & daughter.Son & wife buy House 1A.I gift them the money for the down payment and renovation.I move into the House 1A and complete a renovation that takes about 8 months.During the renovation they live in an apartment I have rented.At the 8 month mark:I’ve completed the House 1A renovation.Son & wife move into House 1A and live there for the next 16 months.Daughter buys House 1B.I gift her the money for the down payment and renovation.I move into the House 1B and complete a renovation that takes about 8 months.During the renovation she lives in the apartment I have rented.At the 16 month mark:I’ve completed the House 1B renovation.Son & wife are living in House 1A.Daughter moves into House 1B and lives there for next 16 months.I buy House 1C for myself.I move into House 1C and complete a renovation that takes about 8 months.Round 2At the 24 month mark:I’ve completed the House 1C renovation.Son & wife sell House 1A and with the profit buy House 2A.They are able to exclude the gain (profit) from the sale as they have owned the home for the last 24 months.

However don't exclude random people from coming in and seeing your work in progress.  

If your marketing or listing said new appliances, AND you didn't explicitly exclude them from the purchase agreement, I'd think you are on the hook.  

There is a 3bed/2.5 bath townhouse for sale in outer SE Portland for sale (probably would be considered a "C" neighborhood but is hip and property values trending up) that I could house hack with an FHA loan and live for only about 200 bucks a month excluding repairs and vacancies (the rental market is hot and the property was built in 2007 so I am only including P&I, MIP, taxes and insurance in this equation; property has no HOA dues).

As for nice neighborhoods and great school districts - they are fairly much by definition excluded from 2%/m returns.

Again, "private lender" comes out of SEC and financial regulations, they are defined to be excluded from SEC and financial regulations.

My combined loss on that one unit, excluding any rental income, just lost appreciation and construction costs, today is somewhere around $200k.

Taking each room down to the studs and replacing all finishes, electrical and plumbing, lighting, walls, paint, trim, tile, etc.Kitchen renovations (excluding separately purchased cabinets): $2,719 - Some electrical work, paint, trim, lighting, etc.If I am allowed to place all $41,740 in the 7 year bucket, as opposed to the 27.5 year bucket, then I am looking at a year 1 after tax savings of ~$6.4K, compared with ~$3.9K in the less favorable scenario.

Section121', which allows us to exclude a gain of up to $250/$500k (single/married) on the sale of personal residence that we've lived in for 2 years or more. 

I accept the fact that the financial/funding tree is now occupied with unwanted fruits, however we are doing our best to sort them out but, the truth remains, in a funding transaction, there are charges all over the world, the united states not excluded.