Just ask for two years of tax filings, if they meet the requirements, put your feelings aside and rent to them, or face the consequences one day.

However think of the long term consequence of selecting a bad tenant meaning someone that is going to give you problems with the rent being paid on time or other problems. 

Your dad could essentially be a fund manager and deploy his IRA into flip transactions, but he could not be hand's on involved in the flipping or receive any compensation.Further, there are potential tax implications if his self directed IRA or Solo 401k flips houses on a regular or repeated basis and therefore is considered to be conducting a trade or business.  

They have no standing to do that in the contract and are only doing it because they know that there is generally little consequence to a tenant breaking a lease.I have to admit I'm surprised you would take this stance.  

Nakatomi Trading Corp.Die-Hard$2.5 billion25.

Property  held for investment is any property that produces portfolio income such as  interest, dividends, annuities, or royalties not derived in the ordinary course  of a trade or business.

You're trading the risk of missing a rent payment, for the risk of a zillion dollar law suit. 

Well, you can do whatever you like... but realize the consequence is reasonably strict if you violate and are caught.

Yes it is true that you cannot use the 1031 on the properties you are dealing with right now because your intent must be to hold for productive use in business trade or investment.  

I am perfectly willing to trade a few dollars here and there to improve my quality of life.