@Troy S. and @Bill S. are right on about the upfront capital costs - $50k land, $30k water/sewer tap, $150/sf construction and you're already into the $180-$200k single family range.  

If you fail to notify him of the unsatisfactory item(s) and fail give him a cancellation notice you stand to lose any earnest money deposit paid. 

In my world of coastal Oregon and California STR's and vacation rentals, prime properties still move very quickly. 

I think he should have held onto it longer (he doesn't need the money), but he's in his 70's and wants to play while he still can!

The investors I've worked with have purchased close to a dozen 2-4 unit multifamily properties so far this year and I've done a few other deals that were more so condos and SFRs, including in coastal and inland north county San Diego.  

There's an 18 plex on market for $1.8M The Oregon Coast- Inventory is generally limited but when you can find it, beyond Coos Bay there is always demand for long term coastal housing.

LLC has more tax treatment options (taxed as a sub S) and better protection than a land trust, if managed correctly.

Your 20’s and 30’s should be about building a career - no matter what. 

Coastal CA with the Bay Area, LA or San Diego will hold its value and it doesn't take too many properties to build long term wealth.

In my case the property is old, bought in the 1980's and was a primary residence for many years,(until recently), there would be a significant amount of money spent on capital improvements over those years that could be added to the 250K exclusion + basis that could be deducted in a typical residential sale.Therefore is that extra capital improvement deduction lost in the 1031 transaction ?