Having not yet verified his income, he would well qualify.

For individuals that qualify for this, they can use their rental property losses to offset their active income.

I have to deny this family who is otherwise likely very qualified.

As you build a track record of successful flips/rehabs, you'll typically qualify for better terms, like higher leverage/reduced down payments.

It took me filing an extension and going through 3 more bookkeepers before I found one who was qualified and wanted to work with me.

Since you can't make improvements or exchange into property you own, your qualified intermediary would take title of the property while you  make the improvements.

Your best bet is to ensure that there are no material modifications that would in any way harm or even moderately delay the ability to rent it out and qualify as a normal SFR (one lease, one family) or sell on the market to an owner-occupant

However, rental real estate activities in which you materially participate aren't passive activities if you qualify as a real estate professional.

This can be a game-changer, especially in neighborhoods like the South Loop or near revitalizing areas like Pilsen, where property values are expected to rise.Improvement Exchanges: Recent IRS rulings allow you to use exchange proceeds to make improvements on a replacement property while still qualifying for 1031 deferral benefits.

You qualify for installment sale treatment on the taxable gain if you go with seller financing, which is at least something.