He spent over 2 hours on a call sharing his vast amount knowledge based on his experiences, being a property manager and investor himself in the Indianapolis market for over 30 years.

@Edwin Saldivar  We have a no seasoning product for non-owner occupied property that would allow you to pull cash out based on the new value.

We worked to cultivate cash flowing houses as the base of our investment pyramid, followed by fewer, nicer houses in an appreciation area (fancier houses in a beach side location), which we use for STRs.  

We take this to mean (based on 100s of real tax court cases) any activities integral to the business of running a rental.

The labor market is still challenging (and not showing signs of improving based on the escalating average age of most contractors).

@Michael Ablan Based on what I've gathered in the space, it's not typical to have these requirements, and that's probably why they're backing out.  

Is this a good place for rental Income properties 30A is mostly an appreciation based market with little to no cashflow if you buy turn key.

Since you’re not paying fair market value for the property, any legitimate claim can, probably successfully, convince a court that the “sale” was a fraudulent transfer.As to what to do, you’re not going to find an answer with which to base a decision on in an online forum.  

His CPA has convinced him going forward everything needs to be calculated based on K-1 tax capital accounts for ownership. 

Based on everything here it seems like something to stay way from.