I am excited by the idea of making additional principal payments on a 15 yr mortgage in the hopes of leveraging the extra rental income to snowball back into Property A’s loan balance down the road. 

Reason why strong relationship-oriented lender relationships are so critical in this business but would have benefited from raising additional contingency reserves for both.

We've been doing a mix of custom residential projects - single family renovations, additions, new builds, etc. - as well as developer driven urban infill projects - small apartment and condo buildings, duplexes, ADUs, site analysis studies, etc.

But you could likely utilize it for secondary expenses like a special assessment or additional living expenses.

You would qualify for both the 121 exclusion and also take advantage of a 1031 exchange if there is any additional tax left over.My decision metric would be based on just how good a rental that property will be.

One additional oddity: the listing agent has not been responsive at all — no replies to texts or returned phone calls so far, which adds to the uncertainty around what’s really going on with the property. 

Here’s the situation: The property was being operated as a 6-bedroom rentalThe owner converted the garage into a bedroomAccording to the seller’s agent, the property was cited by the city for code compliance, mainly related to parking requirementsThe city allegedly required either:Adding additional parking (such as building a carport), orReducing occupancy / removing tenants   The seller chose not to add a carport, and instead removed 3 out of the 6 tenants.The agent also mentioned that if a carport is added, the property could legally go back to renting to all 6 occupants. 

Pad splits usually have large shared areas in addition to the private spaces, that is what makes them a pad split rather than just a house that was converted into an apartment building. 

The extra cash flow that results when you don't have to pay taxes can be used to upgrade the property or purchase additional properties.

For long term rental, find a potential market and see if there are any additional inspections/registries required in order to run a rental in the area.