For some people, it is a preference thing and that is fine too.

Convert the Property to a Primary Residence: If you live in the property for at least two of the five years before selling, you may qualify for the primary residence exclusion, which allows you to exclude up to $250,000 of capital gains ($500,000 for married couples) from taxation.4.

I've been working with an agent for a couple months now in hopes of finding my second deal.

A HELOC may be an option but I'm full time real estate (no W2) and have a couple properties and my DTI is relatively high. 

We would touch up and possible paint a couple of the walls/ceilings.

Prefer to cashflow as close to day #1 as possible.No problem!

I recommend you consult with a lender with expertise in investing, preferably someone local to you, to discuss the lending options best suited for your goals, strategy, and tactics.

If for some reason it were to happen, there's a couple workarounds that can be done.

Meeting that 2 in 5 of the last requirement allows a single owner to shield $250k of appreciation and a married couple to shield $500k.Unless you predict a lot of income from the MTR or you feel that there is a lot of appreciation incoming over the next three years (minus time get the property sold), you may want to consider collecting your $100k (passing GO) and redeploying that money to whatever you feel is its best use. 

I have a couple of short term first trust deeds ready to mature and need to re-deploy this capital.