If you can show that you intended to keep it as a rental long term, then you could execute a 1031, but most people like to have held a prop as a rental for a year or more to be on the good side of the IRS. 

Do your homework, talk to many, make your own decisions then execute.

It is not that easy, there is competition out there, as an investor myself I do borrow from time to time, speed of execution and rates / costs are the 2 things I look at obviously.

Even though my attorney helped me tweak some unfavorable language and clarify some sections, neither mentioned this clause which has saved me on two different deal.INSPECTION PERIOD: The Buyer shall have thirty (30) days from the date of execution of formal contract to perform inspections and examine the records of the Property.

Plus, all the prior executed ORIGINAL Allonges/Note Endorsements that correspond with each Assignment of Mortgage, again, the ORIGINAL recorded copy.

As bad as the publicly traded SFR REITS have been beat up by Wall Street since their IPOs for poor execution of their models and failure to make it into the black at their quarterly reports, I don't think anyone is going to make the argument that they are less competent than subprime borrowers.Absent some massive scale fraud or global collapse of the US or worldwide economy (and again, we did both of these things with subprime, so its not entirely out of the question), I think that the securitization of rental cash flows will provide more liquidity to a market that could certainly use it, and have a net positive effect on the economy.

.(*)" If you collect money that "becomes the security deposit" and you do not have an executed lease, you are on thin ice in my state.

I know when he makes an executive decision it is the right one, because I am able to see things through his eyes.  

Institutional lenders are licensed and have attorneys on staff who do nothing but compliance. 

I figured given the liquidity risk (funds are tied up) and performance risk (amount of effort/execution that goes with rehabbing) the required return must be fairly high relative to required return with other property types.