And it can work really well for you as long as you pay attention to the statute requirements.In order to defer all tax you are selling investment real estate and buying investment real estate of at least the same value you sold. 

Or would the son have to own his half of the home for two years prior to selling in order to qualify for the exclusion?

Quote from @Keira Hamilton: Here are 5 lessons I learned from selling my laundromat last year that can help you as a prospective business buyer.Lesson 1️⃣ - Listing sites can be a legitimate way to buy and sell a business.I will often hear people say that they’re not even going on listing sites because “they only have bottom of the barrel listings,” but this has not been my personal experience.

I would suggest you do some soul searching before you make and decisions to sell.

At that time I will get the house cleaned up and list it on the market and when it sells I've agreed to get reimbursed my costs for reinstatement plus any other costs plus a fee for my efforts.

I would sell and take your gains.

Selling and move on.  

Should we sell this one and invest in a new one and start fresh?

Should I be looking for selling all or a portion of the note? 

I am now working with a realtor and she is saying we could sell it around $380k.