I went to clear it with my CPA but he said I should wait an entire year before doing it to prevent any red flags from the IRS. 

Explain if you could have prevented the situation or what you will do different in the future. 

Obviously, this work is extensive and will need to be done by an experienced contractor to prevent structural issues and leaks.

I have all of the things needed to qualify for hard money but I haven’t purchased a primary residence because I’m in grad school & don’t meet the DTI requirements yet (like most millennials 🤷🏾‍♀️).Will flipping through an LLC prevent me from being a first time home buyer when I’m ready to purchase a primary residence??

That's the hard part for any of us in the helping professions, we can't make the diabetic eat less sugar, or the buyer or seller actually act in a way that maximizes their benefit.

THat being said, if one is preventing quiet and peaceful enjoyment of the property, that shold be stated in the lease as a requirement of the lease. 

Closings frequently go sideways and there could be complications that could prevent it from happening when you think (or at all).

Seriously, call people who have seen it and ask them what prevented them from making an offer.

I use TurboTax to do it, but if it's your first time, you'd likely want to hire a CPA to accurately report everything.I don't know for sure, but I would assume if you reported the income on your taxes and you had no fine print in your FHA documentation preventing you from renting out rooms, then you should be fine to use that money for another property.

I believe it's generally better to get as much loan as possible and save cash for opportunities, but in my case, DTI may prevent me from taking out another mortgage, so I'm thinking if I can't secure a loan, I'll pay it off and take out a LOC on it for future opportunities.Pros: No interest incurred while there is no opportunity and cash doesn't have to just sit in the account.Cons: Bank may reduce line based on market condition.