The roof, AC, plumbing, electrical and flooring will eventually need replacements.

However, there is no specific holding period contained in the tax code or regulations and there is no "safe harbor." 

Duplexes provide privacy, flexibility, and scalability, but strict short-term rental regulations may increase upfront costs and maintenance.

And the locals in Highlands have been fiercely debating STR's and regulations for the last few years, so I wouldn't be comfortable buying there.

Would this just be a matter or working the plumbing out or do I need a specific type of toilet?

Quote from @Adam Macias: Wholesaling as it is today will be a thing of the past.It’ll truly be strange to even hear people and gurus trying to make big money off it.The more people try wholesaling but then end up not having an end buyer or cancelling contracts or trying weird things like novations, the more all of real estate will be regulated and cause requirements like licensing to be able to transact more than just your personal resident purchase.Which I don't know why hasn't happened sooner.Here's all the states (in red or yellow) requiring a license to wholesale or at least have started the process:Credit: REITipsterI think licensing and regulation is a beautiful thing that should happen if you plan to be an wholesaler and do more than one deal... which is going to be the case for anyone taking this business seriously.Or even it being regulated to need a real estate agent to do more than one deal outside of buying a personal residence.I've had plenty of failed attempts with agents in pursuit of wholesale deals and I know exactly why, it's not because the agent couldn't find me deals, it's just not practical to think there's opportunity for the numbers a wholesaler needs to make a profit on top of everyone else needing to these days.Because the only sellers who truly can sell at a deep enough discount are usually those who ran out of time and just didn't do something sooner with their situation.I know many coaches and gurus will disagree with me but there’s no regulations on youtube gurus and what they teach either.If we look at the current state of the market in hot cities, the availability of online resources to the average homeowner, how many deals can you possibly believe are available at 70% of ARV?

Consulting a 1031 exchange accommodator and a CPA ensures compliance with IRS regulations and minimizes unintended tax liabilities.This post does not create a CPA-Client relationship.

The primary risks at this point would be       1) to your lender, the risk of a margin call.       2) To you; underestimating the true cost of a project and cost overruns      3) To you; legal risk of securities regulations if you partner looses money. 

But that doesn't keep the regulators away.

Wholesalers are not regulated by Real Estate Agency, therefore not required to abide by certain laws and disclosures.