I have however worked with accountants where we've re characterized losses from other assets or investments to do a conversion/roll over from deferred account to a self directed account and was able to cancel the gain presented by taking the funds to a self directed Roth IRA account tax free but each unique situation varies.

This will help characterize the risk the lender has by going through the foreclosure with such a deviant.

For properties located in primary markets, instead of a dichotomous characterization of a property either cash flowing or not cash flowing, wouldn't it be more appropriate to measure the degree of cash flow?

I don't know how else to characterize constant lying as anything other than disthonest

So, before I address all of the points I read in this thread, can we agree on the following:- All properties in a given neighborhood will all have different market values,- The simplification of those values could be placed into the following three (3) categories;   * AS-IS (No deferred maintenance has been addressed AND curb-appeal is seriously lacking)   * Enhanced (all deferred maintenance has been addressed and some newer "creature comforts" installed)   * Optimal (highest priced, highest and best use dwelling in the neighborhood)If you agree to these simplified characterization, then the following might be agreeable: @Randy Thomason - [Good and Bad Wholesaler, Double Closings]There are good and bad wholesalers, just like there are good and bad real estate agents and brokers.

The key items to consider are:Would the IRS respect "re-characterization" of income?

But bottom line, I think you are on the right track.I think comments about characterizing this as a "misunderstanding" being a sleaze slumlord move is a bit dramatic. 

Fractional Ownership - CRE, in particular, is characterized by a high unit price. 

So you're in a market that is characterized by "appreciation."  

However I do disagree with the characterization that "nothing moves quickly" - a quality rehab will go under contract quickly as long as it is priced and promoted properly.