Sell it...especially since the gain is tax free assuming that you have lived there for 2 years.

Typically, these deals require some sort of down payments as well, not negotiable. 

Nowadays, that timeline is typically 5 years.

You get access to 80% of your cash back to move to the next purchase.The other option is use a small portion of funds 15% to purchase any SFR or 2-4 units through an investment purchase typically Bank portfolio.

Hard money lender is typically higher interest for a shorter loan period, and are frequently used with fix and flips since it’s a quick project.

The one on capital gains or the one on your income.L.

As in, is there a tax loophole here to avoid capital gains?

Thought that paying capital gains was the only way.

The bank lends you $170K which only covers the 85% and you are required to bring 15% or $30K to closing "PLUS" closing costs unless you get a seller credit.On a typical loan the Bank/Lender does not cover anything related to repair costs, utilities, or closing costs.The seller can contribute up to 2% Max on an investment towards closing costs so again on a $200K purchase they could only offer $4K.

Most each real estate syndications (group investments) go through a progression of stages.All should have a clear beginning, middle, and end.Here are the 4 phases for a typical syndication deal:Phase 1 - AcquirePhase 2 - Add ValuePhase 3 - HoldPhase 4 - Sell 💰The sale is arguably one of the most important phases!