I have a great tenant and very few repairs issues (I put in a new HVAC and water heater a year before I moved out) but will eventually need a new roof (house was built in 2005). 

But I'm one of those marketers in real estate that even though people might not convert in selling their house.

This seems like a lot of work to save 15% of $35k in taxes (Less than $5k.) especially if you have transfer taxes or title insurance, or you convert your long term 15% rate in to your son’s regular income tax bracket.I hate paying taxes as much as the next guy but this lemon isn’t worth squeezing.

I assume you are probably losing a few of those bedrooms for living rooms, kitchens,  hallways, stairways etc. if converted from 2 to 3 units.  

Ask away. you have found a treasure site and if you follow much of the information here eventually, you will be prosperous. 

Do right by them and word spreads, momentum is built and eventually you are raising money from PE firms, family offices etc. if you care to grow beyond your personal network's means. 

For me the answer was, it's more work than I want to handle with little children and I'm not outperforming S&P 500 well enough to be worth the effort.Side point, if you are going for cash flow, you are eventually move to paid off properties so you are managing 20-30 not the 130 other people are quoting you. 

Convert the Property to a Primary Residence: If you live in the property for at least two of the five years before selling, you may qualify for the primary residence exclusion, which allows you to exclude up to $250,000 of capital gains ($500,000 for married couples) from taxation.4.

In my ideal scenario, I would do some more entry level projects to start off while I learn the ins and outs, but my goal would be to eventually work on more luxury flips - larger scaled projects in more desirable neighborhoods (though fewer and farther between).  

I'm just curious to know how these failed deals will eventually unroll.