That said, the whole world (almost) of capital gains is eligible for deferral -- short or long term gain, sales of property, businesses, stock, bitcoin, art, etc. 

@Augustus BukowskiLooks like a stock Google picture...

Since the 1980s (really since 1971 going off the gold standard), financial markets (stocks, bonds, and real estate) have been greatly influenced by Central Bank manipulation of interest rates and other extreme monetary policies.

My wife and I bought and fixed up a foreclosure here for ourselves to live in using the house hacking principles @Alyssa Dyer @Kiera Underwood and @Cassi Justiz mentioned.

But lets try to make this a little more tangible with some numbers (assume renovations are paid for initially with our cash reserves, then with cashflow from the property, and that one additional unit could be renovated and rented per month): Purchase price $350kEstimated rehab costs: $300k 20% down payment (provided by theoretical partner) $70k Loan principle: $280kEstimated current rent: $500x4 = $2,000/mo or $24k/yrAverage rent in the area according to rentometer for a 1 bedroom apartment is $803/month.

If you want a loose comparison to the equities world  DSTs are not designed to be "growth stocks". 

If it is in fact a part of your lot just be sure that it meets the 4 Principles of Highest & Best Use:1) Is it legally permissible 2) Physically possible3) Financially feasible 4) Most profitableCash flow is King but keep in mind that the appraisal will be based on sold comparable sales in your market and written on the FNMA 1025 Form.

Trying to time the real estate market (or stock market) is ALWAYS a bad idea.

I would (nicely) explain to the tenants that they obviously don't understand the principles of a heat pump, which is essentially what an AC system is (in reverse), and if they don't care to learn how to use best practices to be comfortable in the home I am not going to force them nor subsidize them. 

Although I don't do the smaller flips anymore, I have just completed two tear downs financed the same way and sold the first one for $1.45M in two days and the second goes on the market next week.I am a fan of hard money lending, but the same principles apply and it is not wise to be over leveraged at anytime.