They have a profit incentive and it is much less like what the IRS calls a "step transation" (a series of steps that while legal in and of themselves combine to allow you to avoid tax outside the normal approved process).  

However the APR should be above the minimum defined by the IRS depending on the duration of the loan.

I think it’s very worth it if you can qualify for “real estate professional” status as defined by the IRS.  

@Tanya McKinneyReinforce one key point: profits on flips are considered ordinary income by the irs.

@Sean Elliot - Sounds like you have a solid plan set to hop into real estate investing. 

So plan ahead for that.The only other issue is that if the refinance is too close to the sale (not definitive time line but say within the same year as the sale) the IRS could interpret that as an attempt to access gain by using the refinance prior to a 1031. 

I’ve advised most of my clients to look at house hopping (buying, fixing up, and living in a single family).

Here's the link to the Rev Proc you mentioned:https://www.irs.gov/pub/irs-dr...The IRS definition of Replacement property for 1031 purposes:"(2) Replacement property.

Send her a 1099, and file a copy of the 1099 with state/feds so that the IRS will come to her looking for the income tax on that amount of money.

They strictly indicated that address cannot be used for any other purpose - including EIN, IRS and bank purposes. 3) As such for creating an EIN, property tax and bank account purposes - i will need to use my personal/primary residential address in Chicago.