You have already realized the gain so you have to pay taxes on it if unless you can harness any type of losses to offset it.

I'm a first-time investor (already own a primary residence condo), and while I realize that getting great rentals would require buying off-market or doing some kind of value add (flipping) I'm buying off the MLS as a means to simply get started. 

I realize this is highly subjective with a lot of variance, but there must be some average square footage per living unit that one could baseline 'cramped' units against 'spacious' units in an area.Local building code?

No. 2 paying this person may not be ideal in other ways as you could possibly get into issues with them having an assignable contract and not informing you, the seller not realizing they can't have an exclusive right to list contract with you and then you end up with the skip tracer coming back to you for more $ as the 'procuring cause' of the sale. 

@Bryan Normal You’re realizing the catch 22 here….in order for your license to “make you legal” you have to use it as it was intended….actually working As An Agent, with everything going through your broker.

Everyone thinks they can sue to solve the problem.Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

I quickly realized that it would be better to go bigger and bought a 4-plex and a 3-plex the 3-plex needs some work.

Once they realize the landlord is serious about filing for an eviction it's like "pack up the light bulbs! 

Everyone thinks they can sue to solve the problem.Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

I realize this was a completely stupid mistake on my end.