Can we use the step up on this year's taxes and still not have to pay capital gains until the time the home is sold? 

Good luck spinning my actions into bad faith or non-compliance… But perhaps more importantly, think “contemporaneous evidence” in your Sent folder that you could point to - and, if ruled admissible, refer to to refresh your own memory, even on the stand, potentially years later - in court, if needed.

Your property has dropped in value over the last two years?

I have been doing this for over 10 years SOLO, no va's, no dispo managers, just me!

Reality is that these rates we have had the last couple of years were historically low.  

For information, I'm a year out of college and have a very decent W2 in San Diego.

@Kenneth Soles  I have done this too many times to count.and after all the years of dealing with folks that lost their home be it tax foreclosure ( very very rare on the west coast by the way)  or Trustee or Sherrifs sale ( most common).Rent back can work but usually turns into an eviction shortly .Sell it back is another pipe dream.. unless your willing to owner finance it.. then you have the dodd frank stuff if you want to be letter of the law compliant.

I would say unless you are scaling massively in the first year to two years, the contractor in-house does not seem to be a good option.

What I am noticing in the Bay Area is most small multi-family is really old construction around 70-80 years old.

I took out a hard money loan with Kiavi for one year.