Then there were repairs, followed by a lengthy vacancy.

The definition I am told by 1031 exchange companies is that the IRS views anything less than a year as holding for resale purposes and not for investment purposes.So the 1031 companies recommend at least a year unless you want a lengthy fight with the IRS based on cases they have seen come up challenging the 1031.This is why I didn't know if the time had to be continuos or not.I am going to call some 1031 exchange companies today to get another set of eyes on it.Thanks for all the help.

Although Jon and Bryan bring up interesting points I'd be happy to discuss in length, I want to focus on your situation Mike.You own this property I assume, and this is not a sandwich lease..You had it appraised 2 years ago at $205k, and you offered it at a lease option for a little more than that, but now they are trying to get financed and the lender had an appraisal done and it came in at $190k?

Don - I can't make it a fourth without rezoning it - a lengthy and expensive process in MN.

Nothing for vacancy, long term capital (even if its rehabbed, if you plan to hold for 20 years you'll buy roofs, furnaces, ACs and other pricey items), routine maintenance, make ready costs between tenants (some, but not all, may be covered by security deposits), legal expenses, lengthy evictions, accounting expenses, etc.Now there will be some months, most months even, when you only expenses are the PM, taxes and insurance.

as this thread is starting to get a little lengthy.

I’m sure many people would argue against the expense of stainless and or hassles of in door water/ice fridges  In maybe a related or possibly unrelated tangent, I haven’t had a vacancy in more than 3 years and the average length is over 5 years spread over 12 SFR Vegas properties. 

For me, I've found that once the tenant has had a lengthy discussion with you, as long as the house is even remotely viable for them, they'll fill out the app and want in.

Some years will have some large expense - a lengthy eviction, major tenant damage, a new furnace.

I usually get pretty lengthy on posts, trying to work on that...Find the comps, settle on a conservative price and work backwards from your goal.