Doesn't pass smell test.

Did you know....As of Jan 1st - the Gov't has forced on ALL lenders/banks in Canada - when approving a Borrower, they must pass a stress test at a Higher Int Rate (2% higher than approved) before getting the $$.

In PA we need 60 hours of class work to take the test.

. , and sort of an inkblot test for private lending.

You're just testing for how they do after the initial "pitch".

Real Estate on the other hand is a time tested investment vehicle.

I’m looking for feedback on a tried and tested method to undertake in my entrance strategy into the market.

But more importantly the bright line test appears to be the "intent' of the tax payer.If your intent was primarily to resell (most interpret that as a forced appreciation/value add/low ball purchase scenario where the desired equity is present at the time of purchase) then you are treating the property as inventory and 1031 is not appropriate.If your intent was to hold to use or to generate income from, or to take advantage of longer term appreciation then you are treating it as an investment and 1031 is appropriate. 

@Adeel Makda congratulations on passing your test!

Stress testing your expenses in a worst case scenario where you need to replace a large ticket item down the line is a safer way to ensure that the property will always cash flow.Also the only thing catching my eye is the ARV stays at the purchase price even after putting in $5,000 for rehab.