These properties include different foreclosures and those that sell below their market value.

Furthermore, if this is not a property where meaningful appreciation is expected in the near future I would recommend selling.

You're not just selling a tv on craigslist or something. 

With novations, I can offer closer to market value by selling to retail buyers, making it easier to get deals accepted.2.

As an owner you're allowed to manage your own properties.  

Many states have discounted property taxes and lower yearly increases for owner occupied properties.

The exit strategy is to sell each townhome individually, since each will have it's own legal description. 

Before seasoning period ends, I want to sell to my younger brother who purchases with conventional mortgage.Is there anything wrong with this idea?  

Woah 13.85% even on an investment property is super high...I got a heloc at a 7.25% (this is variable with the market as with any HELOC) for an investment property.Talk to your local credit union.

Then you can think of yourself and what you want from a property.