Hi Leo, The short answer is that properties acquired with the intent to rehab and then sell/flip are technically being held for sale and not being held for investment and would not qualify for 1031 Exchange treatment. 

Yes, it does take the right words and lots of visual to teach so that others can understand, but each person has their own way of teaching.  

Justin Eaton aside from asset protection, the tax treatment of the flips is likely completely different than that of the buy-and-hold's.

Also, property that may qualify for 1031 Exchange treatment must satisfy the Qualified Use requirement which means it is real property held for rental, investment, or business use.

Rehab/flipping does not qualify for 1031 Exchange treatment because there is no intent to hold for investment purposes, but is actually bought with the intent to hold for sale. 

But you have to be willing to tame the adrenaline junkie flipping side of your personality.Property that qualifies for 1031 treatment is property you purchased with the intent of holding for productive investment use. 

It will affect your return.Gross Scheduled RevenuesLess: Vacancy/Credit Loss= Gross Operating RevenueLess: Operating Expenses= Net Operating IncomeLess: Debt ServiceLess: CAPEX=CFBT (cash flow before taxes)Less: Taxes=CFAT (cash flow after taxes)In preparing an analysis, I estimate CAPEX, whether I take a percentage of the sales price, cost per SF, or judgment based upon visual inspection coupled with discussions with owners, contractors, inspectors, etc.The basic approach would be to divide your CAPEX by the number of years you plan to own the property (or months depending on your analysis). 

What do you do to mitigate or lessen short-term capital gains treatment on that $1,000,000?

It is a very affordable solution to a marketing area that is currently lacking any real visual pull on the market.

People are visual and need a little help with imagination from time to time.