As such, the profits are taxes are ordinary income subject to self-employment tax. 

@James Robert if you are flipping, even if you hold the property for 1yr, the profit is still taxed as ordinary income. 

Generally speaking, sales of assets such as equipment, buildings, vehicles and furniture will be taxed at ordinary income tax rates, while intangible assets such as goodwill or intellectual property will be taxed at capital gains rates. 

Because they are §1231 losses they can offset ordinary income, which is better than a normal cap loss use of only $3,000 if married.  

Do not take any "out of the ordinary" properties.

I am not your ordinary, dull lecturer.

And then get ready to pay ordinary income (higher) tax on the sale even than long term capital gains.

Short term capital gains is your ordinary income tax rate and long-term capital gains where you hold the property a year or longer is considered long-term capital gains is in as taxed a lower rate.  

I have a specific dollar amount that I keep in there for ordinary repairs, emergencies, or capex.

If you are audited and the IRS looks at your 1031 and there is only your word against your actions, you're going to lose the audit.I totally get you wanting to avoid those nasty ordinary income taxes.