My sense is there's a reason for that.I'd be a bit concerned that some type of failure could result in water damage, in addition to the risks that you mentioned. 

What additional costs and penalties would we face? 

I think I've been able to dig out additional info that would suggest this is much better than as it is presented. 

In addition, the association did not have enough money in their reserves so I couldn't do a HELOC on the unit. 

Have her provide 2 months security deposit in addition to the rent  and use the co signer.

Additionally, I'm not sure if the 40 hours of coursework that I will have completed would ever expire or not.Sorry to use BP as a glorified Google here, but I couldn't find much about this on my own.

@Chris GrenzigIn addition to vinyl plank mentioned in the posts above, I have clients who will finish (polish) a concrete slab and use it as interior flooring.

These are professionals with additional training and a stricter code of ethics.

If there are any obvious issues like posts that are unsupported, joists that look not connected or cut, cracks or crumbling in concrete or block walls, anything that looks wet or signs of pests.I also keep an eye out for what feels like unpermitted additions or covered patios.

So my tax consequence should be about $3,300 (long-term capital gains from Property A, plus depreciation recapture of Property A), in addition to the tax (short term capital gains/ordinary income) on the gain on the sale of the replacement property C (probably about $15K x 24% = about $3,600).