If you think ahead, you can minimize recapture with the right tax planning.So what is recapture?

So when someone has a duplex+ that was built after 1970, its pretty much - set your price. 

There are auctions to sell cars, police auctions, tax impounded auctions, antique auctions, etc.

Tax-Free Exchanges: While 1031 exchanges aren't available to SDIRAs, the tax deferral within the account means you can sell property and reinvest proceeds into new opportunities without immediate tax consequences.

Another concern is after the two years, I still wouldn’t be lendable for most properties in my markets due to that lack of income. 

Well, come tax time, I had to unravel 3 LLCs with quite a bit of expense and am paying double tax because of their lack of care and knowledge.

You could look into forming a C Corp as an alternative way to own this property that could affect your tax returns differently, I am not a CPA or giving tax advise.

Line Item Fee Collected Rents 10% of All Collected Rents New Tenant Search & Onboarding $500 Business Hour Service Calls $80/hour + Materials Cost + Tax After Hour Service Calls $110/hour + Materials Cost + Tax HVAC Cleaning & InspectionGutter CleaningSpring/Fall Exterior CleanupSeasonal Mowing & Weed TrimmingSeasonal Snow PlowingGeneral Contractor Vendor Cost + 10% Oversight Fee

From there, it's easy enough to look up the tax rate for corporations and make your tax burden assumption.

With comps ranging from $875K-$1M and your estimated build cost at $550K, the after-completion value gives you a significant equity cushion, making this project highly attractive to lenders.If you plan to hold and rent the property, you could refinance into a DSCR loan after construction, which bases lending on rental income rather than personal income.