Yes, he can purchase multiple properties of different sorts (single family home, commercial building, DST, Mineral Rights, etc.)One important thing to keep in mind: in order to defer 100% of the capital gains taxes, one would have to spend ALL the cash proceeds from the sale of the property and purchase equal to or greater than the net sales price.

Cost of Small-Scale Development: It’s true that building very small units can have a higher per-unit cost (we spend much of our day educating homeowners on the true all-in costs).

I learned it many years ago when, along with other hungry college buddies of mine, I was politely asked to leave the place after spending two rather happy hours. 

Your tenant would spend 99% of their time in other parts of the house and have very little exposure to this mold.

You'll find that many won't spend the time to consider your $375k loan.  

We can try to estimate the 1st number though, based upon what you've shared - $80k equity + $26k loan balance = $106k current value.You want to spend $65k more, so adding that to current $26k loan = new loan $91k$91k / $106k current value => 86% Loan-To-ValueNo lender's going to touch that!

My choices would be if prices are no issue as in you can spend $1.2 million+ on a single family home: San Jose (10% appreciation historically, 44% in the last 3 years, link below), Santa Clara (both near Silicon Valley with major tech companies), San Mateo.

There is a reason the production guys in Texas can build for 75 a foot to 100 a foot.. and we spend double that.

I hope you all live a long, happy life with all the people who love you and you don't spend undue time worrying about this silly BP thread anymore."

Arrange them based on the problem you are most likely to face first, then spend some time researching your laws, how others handle the issue, etc.