You will get a proration of the gain free according to the amount of time you lived in it versus the amount of time it was rented. 

If it is continuously running you should get access and fix the problem.

However, this is a great way to access markets all across the country that offer decent returns to acquire long term hold properties. 

Living in it for a year and then renting it out could be a smart move to build equity and gain rental experience without the major rehab headaches.

She is also refusing to release my dogs and is denying me access to the property.

(Yeah, that last one was a snarky comment.)CONSYou lose the homeowner capital gain exemption. 

Should I offer this guy a 5 year plan to help him save on capital gains?

There are some key limitations that are important:Passive losses can only offset passive income.Up to $25,000 in passive rental losses may be deducted against non-passive income if the investor actively participates and their modified adjusted gross income is below $100,000.Unused passive losses are carried forward to future tax years.Here’s an IRS article that further discusses the rules: https://www.irs.gov/publications/p9251031 ExchangesThis strategy allows investors to defer capital gains tax when they sell a property if they invest the sale proceeds into a “like-kind” property.

But as you get better and gain experience, you typically see a 30% to 40% cancellation rate.

I'm a realtor currently trying to gain contacts and two key ones I'm lacking right now are an inspector and a handyman.