In terms of compounding and having a safe place to park liquid cash.

I'm 22 and used to work at a seasonal company last summer spraying peoples yards for mosquitos and was getting paid $17/HR.

This is a investment property that you should be liquidate.

Same difference as putting it into a house, except bank accounts don't go down in value and they are liquid and can be cashed out at any time. 

Personally I think the strategy is great with regards to rehab, and I have bought a house before with a credit card, but I also had a ton of liquidity and lots of simultaneous projects and it just made sense - and I didn't pay any interest other than 1% to do an 18 month no-interest, which gives me an effective rate of .667%, or just about free. 

I think if you have the liquidity - this is a great option.

Assume used as an investment rental property.If I wanted to liquidate this asset and did a 1031 for a property "B" costing $2,100,000 and then a year later sell that property "B" for $2,150,000 would I then pay taxes on the $50,000 only?

There’s the ad that’s going to liquidate their asset and help them live out their days closer to family...

I like this advice I would further add that in that scenario I would use an FHA 3.5% down program so you keep as much of the 90k liquid. you cant count on refi.. 

This way you increase the chances you can weather a storm if the market crashes without bleeding from the pockets or having to liquidate the property in a none desirable fashion.