Great write up but you should have tried making it to the 2 year mark to exclude some gain!!  

He paid 930k all said and done and its hard to believe the property gained 600k which would come out to about 1.5ish mil in 9yrs granted it is in a pristine location. 

If you're going to ask your mother to sell her cap gain tax exempt primary residence on payments, at least let her make some interest. 

So you could gain $35000 annually in noi plus appreciation plus tax write offs and exchange that for living in a $500K house for $2500 a month.  

To me this has came off as more of an autobiography with snippets of valuable information.

@Pandu Chimatait is unclear from your post if the total gain is 20K or if you and your partner each have 20K of gain.If we are talking about 40K of gain - you and your partner would be saving $12,000 of taxes(based on Dave's suggested federal and state tax rate).After an approximate $1,000 fee for the use of a 1031 intermediary - there is a potential of $11,000 of savings if you do a 1031.It is something you should consider if you plan to continue investing in real estate.

It doesn't cash flow but I just about hit even each month, while gaining equity and making improvements along the way... which is way better than throwing money into rent!

@Brandon Sturgill,Thank you so much for your detailed and valuable input.

That would make any capital gains taxes be prorated. 

If you live 2 years in it, you won't have to pay taxes on the capital gain, which is huge.