Would be taking too much of a loss for it to make sense.

Put the profit towards a new Primary residence and ~$50k towards a rental property.2) Rent it out and eat the cash flow loss, hoping rents increase.

My partner however is NOT a real estate professional and won’t be able to capitalize on the deductions as much as I will be able to due to their share of the “loss” being a passive loss.

If you're thinking about auctions in other areas like Phoenix, San Diego or Austin, I've built a strong network over the years and could introduce you to some folks who've been down that road.Pat and JasperTurning investment visions into REALITY in Phoenix, AZ - Ranked #1 for residential real estate growth and opportunity by PwC

It sounds like you’re in an exciting phase, with a clear vision of building a legacy through real estate.

Can you sustain the loss for a few years and repairs/turnover costs that can come up?

I have suspended Passive Activity loss that would reduce the gain, but not eliminate the gain from tax POV.

I can see real estate attorneys, insurance, etc. if they are smart.When I look at mixed-use, I am always building the vision around what one thing I am going to put in there for myself.

I had invested in out of state RE in the Midwest before. buy & holds in OH that we ran into several issues with, incompetent PMs and lot of repairs required leading to losses and instability.2.

Otherwise, weigh your options with estimated vacancy and remodeling time, but how you may be able to mitigate losses longer-term with the higher rents you'll presumably be able to collect with new tenants.