Converting from investment to primary does not trigger the tax. 

Top question you need to get a feel for is what would you do with the capital if you sold (or if you did a cash-out refinance) - if you have a good investment idea / usage that exceeds owning the current rental - you should likely pull the trigger, if you don't have a good usage for that capital then probably sit tight

My wifes house is nearly payed off and we are thinking of buying a new one and doing a live and flip while we rent out our current house... and meanwhile I am really trying to get all the info and contacts so I can pull the trigger on a deal once I find a good one and have the tools to take it down succesfully. 

I recently came across an INDEXED  UNIVERSAL LIFE INSURANCE POLICY as far as i understand it, just recently became available to the general public (used to only be available for the already wealthy) that I purchased for myself through a business so its a tax write off. its Indexd meaning it goes up when the market goes up but stays even when the market goes down, (no losses in value)sure it might "only make" about 6-7% and you could potentially make more money in another investmet, but along with the Death Benefit there are also Living Benefits, for illness or injury, which is a great hedge in an event someone become incapacitated in any way their family is still taken care of financially. thats the "isnurance" part of it that pays out "incase"after I think 1-2 years of "loading it" it becomes very Liquid ..you can become your own personal Bank and borrow your investment from yourself, you`ll have to pay it back to yourself, but you again get the interest write off.at the end of your retirement when you end up taking out your money out as "loan to yourself" instead of a draw so it not Taxed as income , essentially "Tax Free" I also understand that banks when lending also count your insurance policys cash value as an asset.which could help with loans from themI was really impressed with how it was presented and was so far one of the best "off the shelf"  retirement investment vehicles (compared to say a Roth IRA) im sure i left a few things out but thats how i understand an indexed universal life insurance policyyou can also "load it" pretty heavily evey year compared something like a Roth Ira which only allows you to load a max of 6k a year?

For example, Pennsylvania Department of Revenue takes the position that transferring a property from your personal name to an LLC (vice versa) triggers realty transfer taxes. 

One more tip – people remember stories that trigger their emotions.

If there was a Fire, Windstorm, Etc. that is covered by the policy and it results in a loss of Rental income, that coverage would be triggered. 

I have explored this idea in the Caribbean and South America a few times and never pulled the trigger as it was too much headache. 

I have homeowner's insurance and they do cover injury.

For liability issues I feel like people can injury themselves in a number of ways like take a tumble down the stairs or burn their hand on stovetop so a simple treadmill doesn't seem too dangerous to me?