Would appreciate advice and even offers for partnership in this project maybe from someone experienced.

Once you find a good property and all the numbers make sense - pull the trigger.

You have three choices...transfer the property and keep the loan in tact hoping they won't trigger due on sale, refinance into a loan that allows it, or simply leave things as they are. 

One of the other factors that kept me from pulling the trigger is that the city has never passed any real STR regulation.

However, to my understanding, a 1031 conversion of an investment property to your primary residence after a safe harbor of two years does not trigger a tax event.

 I have been researching and browsing through bigger pockets and different real estate investment info but haven’t pulled the trigger on anything.

I'm also hopeful to get some local cooperation now that he's claiming partnerships with local government. 

They use leverage in some of their funds, which can increase returns, especially if they have a low cost of capital (but potentially increase risk and trigger UBIT issues).

Otherwise, a partnership, private lenders, or even hard money lenders might be an option.

A 1031 exchange doesn’t apply, but funding through a self-directed IRA can defer taxes, though profits from debt financing may trigger UBIT.To reduce taxes, consider forming an LLC for better expense deductions, offsetting gains with investment losses, or holding the property for 12+ months to qualify for lower long-term capital gains rates.This post does not create a CPA-Client relationship.