Not to say those problems didn't happen, but how did you attempt to manage them?

.), but have no clear answer on whether our basement could qualify as a 3rd bedroom and the black and white to verify.Based on the attempted drawing to scale of the basement, are we able to make the basement a 3rd bedroom?

I am attempting to purchase a tri-plex in a somewhat small town.

It’s definitely a challenging market segment and if you’re attempting it out of state, the higher turnover rate and increased property damage can be real profit killers due to more vacancy, increased PM fees and rates (15% is more than double the rate I pay for example) plus you’re likely to have higher costs on maintenance, leasing, inspections, turnover/make readys, etc. just because sec. 8 tenants are a lot harder on units and also super high maintenance to manage.

In a jurisdiction where you can set policies to preclude having your unit approved by the welfare office it is a no brainer to simply avoid renting to S8. 

Simply, there's not a ton of deals here that I'd be able to get a loan for (mostly based on my income rather than down payment) and the ones that I can afford/qualify for are generally in neighborhoods I wouldn't feel comfortable living in. 

The person doing it for me will not be making any money off this transaction and will simply be doing this as a personal favor to me, and I just wanted to clarify the tax ramifications, if any, for both of us. 

So again, sell as yourself, sell as himself, buy as a disregarded LLC - this technically does not change the taxpayer and would be permissable for 1031 purposes.I always counsel you to make the deeds match as closely as possible simply because it avoids questions and fluke situations with inexperienced field agents in an audit. 

So there's simply no comparison. 

If you wanted to attempt to "sub-syndicate" with one of our funds, I would follow the suggestion of some of the other posters here and form an LLC made of accredited investors.