I see that choice as high risk.  

The appreciation for the property is definitely going to be long term and not short term, so selling now isn’t ideal.The property manager agreed to market it as a medium term rental, so we’ll try that, but it's new to both of us, and it seems like it would have to rent at $3700 to be profitable; does that seem too high to the folks here?  

The STR has high-traffic, people in and out every week, and the MTR doesn't have that high traffic but its about 180 miles away and I don't want any  issues when it sits empty for a week or two. 

That's a pretty high cost for an investment that hasn't paid out yet and the returns are unknown.

An incredible infrastructure of subway, speedways and high speed trains to the rest of the country had help as well.If interested in investing in Madrid, I will be happy to meet and give specific tips and be your host in Real Estate subjects.RegardsDiego Martínez León

I’m not saying it can’t work because folks like Brandon Turner swear by partnerships, I’m just saying exercise extra caution.

If the property doesn't appraise that high, you will have to lower your loan amount and won't be able to get back all of the cash that you invested. 

Perhaps I’m missing something in the equation, but I was thinking that a mobile home would be easier to flip in a market like Minneapolis where prices are high and where flipping regular homes is very tough.

In a high-priced market like Denver and Colorado Springs here (or San Diego where you're at), there are plenty of people who find a whole apartment rent unattainable and will rent a room. 

@Dan BeckerMany times in high value areas, the tax liability isn't nearly as high as some would lead you to believe...Anyway, to you question:  no, there really isnt a great way for you to get the property and get the step up in basis.Honestly, your question doesn't make sense:  "Is there any creative deal structure that can be used so that I can buy and occupy the home including the assumed improvements, repairs and maintenance, while allowing the seller to preserve the step-up tax shield for their descendants?"