The Governmemt then “sold” individual apartments to their occupants or other interested parties for $500.

Property management involves overseeing and maintaining rental properties on behalf of the property owner.

This all comes down to how you're structured, how the flip cost were accounted for, if there is a partner (you mentioned "we").If it is an S Corporation and you "distribute" or "sell" the property to yourself, if there is any loss on value, which probably there isn't, know it most likely won't be deductible if it's a related party transaction.  

Is anyone willing to run some comps for us as we want a 3rd party opinion from the wholesaler. 

Due to his lack of communication ability he has to work through third parties such as myself to obtain this critically needed information.

Nonpassive income: Real Estate Professionals, STRs and K1s from businesses where you have hands-on involvement aka material participation.Each group has its own rules, and generally they cannot offset one another.

The rough part is this might be a January rental.

For a single family home the size and scope you're describing, I wouldn't involve an architect unless you're looking for end-to-end project management.   

Without a VERY good and valid reason, it may be fraud.You may want to get an attorney involved and/or the appropriate state board.

Locally in PA, im just involved with commercial real estate.