Rent each house for a year and take advantage of the lower rate for capital gains tax when you sell.

I got a full time marketing job offer for a great lending company and I’m probably going to take it for more stability and to gain more expertise in marketing for future real estate work.

The property is in Maine with a 7.15% cap gains rate.

Losing 8% whenever I sell makes a purely "appreciation play" not nearly as valuable. 

Also, when the balloon is due in 7 years, how does it work from his standpoint when it comes to capital gains taxes?

He was telling me about one of the new laws that was enacted this year that in order to avoid capital gains tax when selling a “personal residence” you NOW have to have lived in the property for 8 years.

Hopefully Brandon would see this and put in his much valuable 2cents.

However if you had passive income that offset it you would have gained a tax benefit of $1,328 * (insert your marginal tax rate). 

Of course the real opportunity is to improve on that NOI that I will be inheriting from the current seller.I'm doing a 1031 exchange (thanks for all the education @Dave Foster) which should also help me save on the capital gains taxes. 

I don't see any advantage to be gained by your plan.