Terminix told me that they did a treatment  in 2005 before I bought this house.I have termite contract since I bought the house  from 2008.  

Flipping property does not qualify for 1031 Exchange treatment.  

I got an estimate for a new septic and found that there wasn't enough room for a traditional septic (so we thought) and needed a special treatment system which is very expensive.  

What they haven't necessarily done is the appropriate level of mold treatment.

I parlayed that one Bay area house into 2 homes in Palo Alto.. if you know anything About BAy area real estate you know where I am going with this.. the 500k tax free exemption when you move is the single best tax treatment we have as Americans..

If the LLC held the property, and you owned the LLC, you still get all the income and tax treatment of a sole proprietor, but the liability bucks stood at the entity level.

@Eric Long - the idea being to take a loss on cashflow every month to lower taxable income while banking on appreciation and the favorable tax treatment of long term capital gains when they sell? 

Also I remind them that they will be charged for treatment if bugs are found in their house.

You don't get long term capital gain treatment for flips. 

Just in terms of the tax treatment - it could get more complicated.