The industry term for this is “dealer property” there is a great deal of case law on the issue as to what you should be considering in performing this analysis.If the property is treated as inventory, the gain is ordinary income, not capital gain.A conservative approach is to hold the property 2-years post completion to treat it as a capital asset.You should speak to your tax advisor on this issue as it is a complex analysis.

So, what he sent me was a 10 unit small apartment complex.

Maybe I've only dealt with larger complexes where they take their time prepping the unit prior to a new tenant moving in, and not letting someone move in with the old tenant's hair still in the bathroom sink.

most folks would prefer a complex in the 10-20 range near or around the plaza and paseo but very hard to get a deal there. 

 I am a new member and we finally closed on my first multi family investment last week. It is 68 units in Orange Texas. It flooded  for the first time during hurricane Harvey. So it will need a complete interior rehab...

Say you buy small apartment complex for $1M and apply for the exemption.

We partner with Matt Faircloth on one of his multi-family complexes and he's in the process of moving his Trenton portfolio to SlateHouse. 

Those "craft growers" that have a niche that is more labor intense, complex, etc. will still be able to grow and have a market. 

There was on podcast about one guy who started by college town and got 5 properties there and then moved on to big apartment complexes.

I am shopping insurance for the two 4-plex units that are basically together as one 8 unit complex.