@Nathan G.How would you characterize the laws in your state in regards to favoring the tenant or the property owner?

You would think reading some of this very dubious commentary it's as simple as buying any nature of real property characterizing 99% of it as something other than 27.5 / 31 year property per a "Cost Seg Study" and then merrily expensing the whole kit and caboodle in year 1 - voila.Good luck with that unless you really enjoy playing tax deduction Russian Roulette.

Given your characterization of the condition, the rehab budget of $650,000 $11,000 a unit seems low.

(They say they are living in a previous 1031 exchange already so assuming that was also California based maybe they wait until a sale rather than just a re-characterization?)

I am targeting submarkets within these areas that are characterized by high-growth, land value appreciation and connectivity, potentially within gentrifying neighborhoods and/or opportunity zones. 

The repayment is re-characterized as rollover.Can one takes a COVID related distribution from a ROTH IRA, and repays it into a ROTH solo 401k within the 3 years, creating a defacto backdoor ROTH IRA to ROTH 401k rollover?

@Mark HamIt's true that you can't avoid the basis adjustment (and thus the gain increase) by not taking depreciation, however it's not correct that one cannot avoid 1250 gain by not taking depreciation as some posters have conveyed.1250 gain is a re-characterization from one type of capital gain to another. 

These markets are characterized by historically strong demand fundamentals, limited inventory, and a dearth of existing real estate operators.

LOL,  and an apt characterization.  

I do not believe it would be illegal, but the IRS might object to the characterization of the loan as principal-only payments.