Conversely, Reg A is the SEC equivalent of a blank check for the most part, but can take up to a year to get processed.Find these folks, and let them do your heavy lifting for you.

@Jim Herbst , @Stephen Underhill , @Aaron Junck , @Bryan H, As @Wayne Brooks said and I will confirm:It is an addition to your actual basis; however, as of the date of conversion to a rental it is recomputed as the lower of your actual basis or Fair Market Value.As long as you lived there at least two full years.

So likely payment would happen just before start of construction.I have recruited a builder friend of mine to partner with, but Seattle is not his primary building area and SFH are more his specialty but he has done multiple townhome projects and a few apartments.I have found two private lenders willing to cover 100% costs of the following two options:Build 12000 square feet worth of town homes (seattle uses this floor to area ratio to determine building size , for townhomes the conversion is 1.2 build-able feet per lot square foot.

I'm curious what people think about my set up plans (based on conversations with my lawyer), and I have one additional question that I'd love to get some feedback on.For my rental business, my lawyer has suggested that I set up a management company LLC that will act at the property manager for all of my rentals.

You typically have two years to find property that must have a similar use: Our friend @Bill Exeter has a great page detailing this type of exchange: http://www.exeter1031.com/1033_exchange_faqs.aspx#howSection 1033 US Tax Code(B)Period within which property must be replaced The period referred to in subparagraph (A) shall be the period beginning with the date of the disposition of the converted property, or the earliest date of the threat or imminence of requisition or condemnation of the converted property, whichever is the earlier, and ending—(i) 2 years after the close of the first taxable year in which any part of the gain upon the conversion is realized, or(ii) subject to such terms and conditions as may be specified by the Secretary, at the close of such later date as the Secretary may designate on application by the taxpayer.

If they don't, move along.Do not pay for conversation and consultation but be willing to pay for implementation of the entity structure and associated documents (articles of incorporation, etc)If either you or your son own other businesses consider an S corp.

@Charley Fernandez I understand what you are doing and have a few (jaded) comments. 1) She couldn't afford last month's rent (late) 2) She couldn't afford this month's rent (late and partial payment) 3) See the pattern (digging deeper hole)?

My gut feeling is you will find it is only zone as a duplex and no permits were ever received to allow the conversion to a tri-plex.

So I can't be very helpful in this conversation other than to try and drag in the guys that'll know: @Phillip Dwyer , @Robert Adams

Scott, just didn't say it, sounds like the contractor is playing you, I hate that.I try to have a little conversation with a new contractor in asking for any bid.I'll mention I'm in the business, I give a general scope of work, in doing that I mention some of the steps involved, just to let them know I know.