If it’s worth it as a long-term rental or there’s good appreciation in neighborhood, may be worth the risk of moving forward with back-up plan to sell or long-term rental if HOA restricts ADU or STR in future.

Hello BiggerPockets,I have a seller who is open to selling me his home subject-to.

Figure a few grand to paint rooms, replace carpet in a room, deep clean and spruce the property, replace a fixture or two, etc.If you have to replace your resident annually the $9600 total income will get a gut punch.The true value of the higher-end neighborhoods is residents know if they move out of the home they have it's a challenge to find another, especially if they have been there a few years and have a competitively rewarding rent rate.All this really is is basic economics...sell ten custom widgets for $1000 or 100 standard widgets for $100 each.

You can sell the property, 1031 exchange into something else and defer all capital gains. the tax burden you owe would come out of the proceeds.

For information when we come back to the US we plan to sell this residence and roll equity into our next primary, so this is not a property i plan to keep as a long term rental. 

You never know who might know somebody who is looking to sell a property.

When you sell then replace.

Especially during the bear markets, basics are the most important KPI.Reduce the amount of personal cash in the deal.Ensure that the property can provide enough cashflow consistently to sustain itself Wait for the best time to sellNever, ever, nevereverever, put yourself in a position that forces you to sell at the worst possible time.

I'm in the process of selling my first project and have some down time. 

I know bare minimum I could turn around after the redemption period and just sell it for a higher amount.