I'm currently allowing tenants to use their own lawnchairs in common areas.

That alone would make me tell them to pound sand. for this exact scenario is why folks really should do business with licensed agents as opposed to unlicensed wholesalers if this was an un licensed  wholesaler scenario my response would be good luck you have little chance of getting any thing out of them..

I grew up ridiculously poor, virtually everyone I knew were renters, and they all had the same things in common - a series of poor life choices and ignored opportunities that kept them renters.

My recommendation of this company would really depend on the loan scenario. ya I suspect these companies make a pretty good amount of cash on their turn downs..

Is this common practice or does it at least seem possible?

If what I wrote is not clear to you or if some of my assumptions are wrong, then stop your DIY attempt and hire a tax professional.I am in the same boat but I see it the other way around; I should use Form 8949 vs 4797 for almost this exact scenario: owned home almost 2 years, then rented 14 months, then sold.I moved after not quite 2 years due to military orders and qualify for a partial exclusion.I received 1099-S which p523 states "You received a Form 1099-S.

There are many tax strategies.Structuring operations with a holdings and management company is a common strategy among real estate investors.

This Is a common concern for people doing a 1031 exchange.

You use the funds of others to fund the deal, you do the work with rehabbing, renting, and managing side of the deal and both you and the initial investor whom invested their funds split the profits 50/50.This is one common way it is done for fix and flip.

We do cross-collateralization with a 1st lien on the new property and a 2nd on a rental to cover more of the purchase price and possibly some of the rehab to allow for a BRRRR scenario.