We’re trying to figure out how to avoid the short term gain tax implication of the sale since were in the highest bracket and that will basically eat into all of our profit.

I wish my thoughts were as profitable as @Jay Hinrichs!

Charlotte is a big city, rent to price ratios are generally less lucrative in cities and moreso in rural areas.The profitability rules for real estate don't work everywhere.

For example, if you want to generate a monthly cash flow of $3,000, then a good strategy to pursue is buying rental properties that generate cash flow until you reach that figure.

Many investors are adding value and generating 5-10 years worth of $100 monthly cash flows..in the 1st year of ownership. 

Will we be saying goodbye to our profit?

If the company complete the process of review in a positive way and is being announced that the landowner doesn't have enough money to pay for construction, then they look for lenders who can agree with the profitability of the project.

My realtor mentioned that once they clear that number the leftover money may go back into my principal but he wasn’t sure and my loan originator told me she was also unsure but she did say that banks can’t profit from a short sale.

., we do the renovations and once the property is sold the profit would be split 50-50.

In analyzing my numbers I’ve even tried to settle for a minimum profit just so I can get in the game and gain some experience.