Second mistake- when I rent to someone I make sure that ALL adults are on the contract and can pay independently of each other.

Of course the other explanation is that they got a good deal.Still, I am confused how an appraisal, by an independent bank hired appraiser, can come back fine and the lender doesn't accept it.

Steven, what State are you in? Depending

Subsidizing your biggest expense to someone else is an amazing way to get yourself on the fast track to financial independence.

Have an independent agent value your house and see what their perspective for FMV is from a third party that's not involved. 

Most times they get sold to large national banks, who have better things to do than audit one little loan.

My question is:a) Can I lump them into 1 income in Schedule C (even though in my books it will be separate for Audit purposesb) There are 3 properties I am not 100% owner but 50% owner, can I also lump those into Schedule C or would I have to do Schedule E for those?

Between both of those guys this evening, I was able to sort it out and plan my next moves.So basically the independent zoning authority I was looking for was a combo of this attorney and an expeditor.

What's working for you is the extraordinary appreciation even befe construction is complete and the fact that you are now uncomfortable with holding such an asset for investment use.So in your case it's going to come down to what you and your accountant believe you can demonstrate as a legitimate intent.  1031s are not an audit trigger but my rule is never do something just because you can get away with it. 

If that is not available, look for Independent Agents that insure Real Estate properties, Developers, Contractors, Builders.