The current owner rented the house after she moved out but did NOT get it tested for lead and did NOT register the house with the county, both of which are against the law. 

I also don't find it fair that after you pour all your hard work into a property, improve it thus improving the neighborhood, that a law can be enacted that controls what you can or can't do with that property. 

@Logan LarochelleUltimately, everything you report on the return can be questioned by the IRS...will they...Your role is to report an accurate return based on the tax laws provided to us.If the IRS questions anything you should say you are excluding the gain via section 121.Show them the closing documents on the day you purchased the home and the closing documents when you sold the home.Then to show that you lived in the home for 2 years - show them the receipts of utilities that are in your name.Likely they won't audit you - but in the chance that they do - you should at least have the documentation.

The coursework focuses on compliance with federal and state law, not on how cash on cash returns work!

IMO, the class is much more about passing the test than it is about practical real estate success.

The only luck, if any, that exists in business is bad luck, all else depends on strict business practices......proper and thorough screening.

We just went under contract on a 284 unit deal in Houston, TX.We used a local attorney for the PSA (purchase sale agreement) and who was familiar with local laws and customs like using the Texas equivalent of an ALTA title insurance, etc.Also keep in mind that for commercial projects, a large (6 figure) deposit will be required and in hot markets a portion of it will be non refundable.

It's not that western cultural norms are better or anything like that, but there's about a 99.99% chance that your rental property was built from the ground up to assume western cultural norms would be practiced by residents. 

They told me nothing but the guy was a youngish doctor and he was having trouble getting a practice established but had been offered a teaching position at a medical school back east.

Thanks for the brilliant and practical way to get the best of both worlds!