@Kerry Noble Jr  I used to live in Indianapolis before moving to Georgia. 

I live in California but am looking to invest in Texas, Alabama.  

I was fine with all these numbers.Then I met with contractors...First, I wanted to add a new bathroom and approximately 450 sq ft of additional living space.

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I live in FL, 2024 my first year in RE, I have a scorp private money lender/partner and other RE related businesses STR and interior design.

I'd sell every Cleveland house and put your money in a better market. just my 2 cents as someone from ohio and who lived in columbus for 12 years

I'm assuming that this situation wouldn't pass inspection, but one could argue that all the spaces the guests have access to (i.e. bedroom, bathroom) are safe and habitable + the guests wouldn't be exposed to the kitchen.Also, do the city inspectors inspect other parts of the home the guests won't access (i.e. inspectors check the basement for water infiltration even though no guests would ever be living or even going down there). 

She prefers they sell the house right now, as is, and live off their profit.

This happened while a tenant was living there.

.- The townhouse you're moving into is currently a rental, but you plan to live there two years for the 121 exclusion.