Also never pay any upfront fees and go with a trusted lender who closes through a title company. 

Hi, I'm closing on my first STR in April a 3 Bed/3 Bath property. 

They have close family in the area they invest, perhaps even living in the investment property itself like their child who is a college student and rents other rooms in the house to friends, or their sibling or parent.

Now, with the ADU rules, developers are buying anything close with some extra space so there may only be scraps left that wouldn't pass FHA or would price you out.

The IRS may scrutinize such transactions, especially if the "swap and drop" occurs too close in time.If the partnership has to be dissolved immediately it will be tough to sell the one property and defer taxes individually. 

Be prepared to come in with additional cash to close due the the appraisal.   

Quote from @Duarte Marques: Hey BP community, I'm new to real estate investing and have been studying (reading books, watching webinars, constructing excel cash flow models,...) close to a year.

Because we have been in growth mode acquiring properties with closing costs and rehab costs our business has been operating at a loss on paper each year not having to pay taxes for the business. 

I was in contract to buy 100 houses from one builder who was selling for 250k in 06 my contract price 125k each.. thankfully I did not close as within 12 months these were trading as I said in the 50 to 60k range..

Purchase price: $15,000 Cash invested: $25,000 Sub to deal - paid the seller and wholesaler $15,000 + $7500 closing costs to assume $84,000 mortgage with a monthly PITI of $575.