The only difference is the seller is behind on payments, which is irrelevant if the sale covers all the debt and can occur before the foreclosure sale date. 

The 5 unit building was vacant and only about half renovated so it’s been a total lease up which has also occurred much faster than any other building I have because I have very little turnover typically.

Capital calls can happen to extremely experienced investors (including multiple gurus that I follow) when unforeseen circumstances occur. 

As long as the gain you incur from the sale of your property AND the investment with bonus depreciation occur in the same calendar year, it's possible to defer all of the tax exposure you would otherwise have.  

These newbies don’t realize the reason many got in trouble 15 years ago was 100% financing and real estate prices dropped and these loans were to unqualified peopleBasically this is the same thing as these people are not qualified to own a home but paid $10k on some course that most likely sells a lifestyle and some fairytale scenario that occurs once in a blue moon.

This occurs and could have been vindictive tenants or simply a robbery.

assuming work completes after closing.In the event of an audit, is it a red flag if we claim an "improvement" after the closing date occurred?   

Sounds like you (or prior owners) failed to mitigate damage by allowing this to occur over a long period of time.

You deal with other people savings, and if some problems occur, you might have huge problems with the SEC.Please don't take my comment as negative, it's quite the opposite.

Hi Mary, you wouldn't need to worry about that if it occurs within the same calendar year.