Then once you spend the money for that.. then the contractor will simply file a UNJUST Enrichment claim so your back to square one.. 

And there is a constant mention of Guaranteed returns there is no Guarantee unless its the federal govmit on 250k or less FDIC insured .. this was simply investor greed.. investors did not understand what they were investing in what the risks were and were blinded by the returns offered.. no one put a gun to their head.. investor make bad investments all the time..  

So if the LP's have enough cash they simply pay the loan off and own it free and clear.. but the size of the deals are so large raising cash to pay off debt simply is not realistic at all so if the property goes into default your junior position investors find themselves wiped out.Further more thats why a debt fund like Chris has can be a good choice for the very conservative investor..

But if the guest was drunk, didn't know they broke a bottle, or simply failed to tell the owner, now what?  

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

What would you do in my shoes  If you are talking about $90k profit before transfers in Cumberland...without question id sell it instead of holding it. 

I am sure it will all work out for you in the long run.. we sold ours and made a tiny profit on each but its better than a loss right ?

If you live there 2 years or more before selling you will be exempt from tax on the 1st $250k in profit which is a nice bonus. 

and are you looking to walk away with cash or simply refinance (meaning paying off) what you owe? 

Caveat is that you should be reinvesting those profits back into other smart investments so that you aren't missing out on compounding gains.