I realize my situation could be worse, I could be purchasing in Florida ;)  Caveat Emptor especially in Florida :)

Sure I helped a bunch of people in tough situations, but when I think back to all the wasted hours and effort involved in a short sale, it makes my blood boil.I would still list one for a good client, but only if the seller agreed to have a local attorney handle the negotiations and closing.  

As always, I'm also looking for any input on my situation or decisions thus far. 

Was this a situation where the investor financially backed the project and you ran it, I.e. you scheduled the work, found the contractors, sold the house for him etc?

I'm currently in a similar situation where there's no pictures of the interior but one side of the duplex is rented.

My current situation is outlined below, and I was wondering if it’s possible for any experienced investors to explain to me how to obtain my goal.

This is a little bit of a different situation.

In my particular situation, I could lose 58% of my income and I would still be able to service my total expenses.

It's one of those "least nice properties in a nice area" situations; I'd be looking at holding the property over the long term and there is ample new, high-quality construction occurring in the neighborhood, which is situated in the heart of the most desirable downtown area in my city.

From your post, it sounded like the SCDOR and your CPA are treating your situation as though you are selling the homes.