I know, in our state, you lost the homestead exemption but it doesn't equate to double the taxes...not even close.

@Melissa Ewbank,IMHO - you are talking about a short-term hold possibly (or 2 years if you're trying to get the owner-occ IRS exemption) - not a flip necessarily.

Thanks  Consider looking into the "Delayed Financing Exemption" option. 

Appliances and life-safety systems and equipment are exempt from these limits.Commercial Space:Commercial space is limited to 20% of the net rentable area of the project and 20% of the total effective gross project income.Acquisitions: The mortgage amount is limited to the lowest of:1)85% of appraised value2)85% of certifiable transaction cost.3)85% of net income capitalized by loan constant (minimum 1.17 debt service coverage)4)Statutory per unit loan limits established by HUDRefinancing: The mortgage amount is limited to the lowest of:1)85% of appraised value2)The greater of:a) 100% of certifiable transaction costsb) 80% of appraised value3)85% of net income capitalized by loan constant4)Statutory per unit loan limits established by HUD

Property Tax w/o exemption = 1.06% of 315k sales price = $3340 annual prop tax.

It's been discussed here before, but just because you hold for 366 days doesn't mean you're exempt from paying ordinary income taxes...

I either want to sell the place and get the full exemption or hold it long term as a rental.Anyone else deal with a similar situation?

I've done some research and have discovered that churches are exempt from paying property taxes as long as the building is used solely for religous activities.  

If you purchase house 2 for your primary residence, then you may not want to put that in an LLC while you are living in it, so that you get the deductions for mortgage interest and property taxes, plus any homestead exemptions provided by your county or state. 

@Tom LaffertyThe Solo 401k is generally exempt from UDFI tax on leveraged real estate.