Leaving me with $12,000 per year in clear theoretical profit.

When you put it back on the market, make it clear that work was done, as agents will be recognize the listing and will wonder why the price increased.Oh, and find a great listing agent to list it for you instead of doing it yourself.

So far, they required full application showing employment and net worth, have checked our credit, requested months of bank statements and documentation verifying deposits, including direct deposits that clearly state what it is for (payroll dept, property management, etc.), even though the program says just verify cash available for prepaids.

I understand that in NJ you can vacant a 1-3 unit home upon your move in date by stating that you intend to move in. How is your move in defined or tracked? What is the minimum time you have to live there? A year?
Say...

May clear the decks and head there on Monday.

Change boyfriend/girlfriend into husband/wife and the issue is clear.

These would all be free and clear According to our 1031 I have to spend 145k or more, so we have been looking in our local area but have started to look at smaller towns outside of the Indianapolis area just trying to stay close that seems to be my comfort zone for now thanks for the help

Do you have clear title?

As Jason mentioned, try to get the expectations clear quickly up front.I have tons of "I don't really want the job" bids....Then, there are those that bid based on what it will be worth after it's done and the increase in value is what they want......LOL!

Item 3 isn't a prohibited transaction, but it is a contribution.1 and 2 clearly are because the qualified plan (Agent John's plan, I assume) is doing a transaction that personally benefits John.