Property you purchase primarily to fix n flip does not qualify for 1031 treatment.

Property that qualifies for 1031 treatment is property that you purchased with the intent to hold for productive use in trade business or for investment.  

@Susan Vanderburgh, Unfortunately, properties that are required with the intent to rehab and then immediately sell or flip do not qualify for 1031 Exchange treatment.

These benefits fall into five main categories – Depreciation, Cost-Segregation, Passive Income Tax Treatment, 1031 Like-Kind Exchanges, and Death.

If the latter, what is the tax treatment for this fee?

Property eligible for 1031 treatment is property you intend to hold for productive use. 

Everything in writing....The ties to the previous owners make me nervous......you are now the owners and they aren't YOUR friends or family....and they have likely gotten "special" treatment by the previous owner....no more..... be strict on rent payment (i.e no late, no partials etc)

Then can paint the place, do some window treatments and it will likely go fast at that point. 

:Taxes have NOT been taken into account, but I think you all know that real estate beats the stock market hands down in this category.I am not sure how you came to the conclusion that real estate gets favorable tax treatment as compared to equity investing. 

Buyer has accepted but contract not yet fully executed, as many know the way FNMA works is you make the offer, they give you a verbal acknowledgement, then you have 5 days to "formalize" your offer with their REO addendum, then they turn around and execute the contract.This home has some high end stainless steel kitchen appliances, Supra washer dryer combos (two of them), Dorn Bracht faucets, brand new air conditioning units for outside Gazebos, steam shower body jet roman tub modular units, Miele dishwasher, 48" long SS outside BBQ unit, etc etc etc...and because the home was never 100% finished, some of those appliances were not hooked up or installed, they sort of sat in their space but some still had styrofoam wraps around them or manuals taped over them.So, I listed all those in my contract to purchase, where you typically list included items, like ceiling fans, window treatment blah blah blah.The Listing Agent wiped all that out.