Period. 

You’ll still need to pay tax on depreciation recapture from the period it was rented.If you sell after March 2026, you’d lose the exclusion and the entire gain would generally be taxable.Oregon doesn’t impose an extra “penalty,” but it does follow federal rules pretty closely—so you’d owe state income tax on any taxable gain that isn’t excluded federally.In short: sell before March 2026 to qualify for the exclusion, and plan for some tax on the depreciation you took while it was a rental.Perfect advice, right on the money! 

I am concerned if tenant vacates (who is original tenant for last 6 years ever since i bought this property hoping she will extend lease which is coming up in 4 months from now) it will be bit hard to take care of mortgage for many months from money from my pocket.

The arguments of impending defaults are ridiculous over an extending of term 20yrs. 

With your income + credit + experience, lenders WILL compete for this.You’ve got:800+ creditHigh W2Experience in operations/asset managementA realtor rebate (which is basically free down payment)Stabilized assets, not heavy value-addsThat’s the borrower every bank wants.My recommendation (most realistic + easiest):Step 1: Lock all 4 under contract with extended closingsYou want 60–90 days if possible.Step 2: Go to 2–3 local/regional Arkansas banks and pitch the entire roadmapTell them:“I need short-term financing (6–24 months) on up to four 4-plexes with a guaranteed takeout via conventional OO loans every 12 months.”This language is what commercial lenders understand.Step 3: Use one bank to fund all four under a master note / line of creditInterest-only, 12–24 months, no prepay penalties.Step 4: Refinance each one every 12 months into your OO productFree up capital, rinse, repeat.Final thoughtYour plan is aggressive, but it’s far from unrealistic.

Current U.S. standards cap qualified loans at 30 years, so extending terms to 50 years would need legislative changes and new compliance frameworks.

Some lenders will allow you to pay down the principal balance up to 20% of the original principal balance without triggering the penalty, others will flat out state in the note that ANY prepayment partial or full within the period specified will trigger the penalty. 

That is partially amplified due to the fact that more of the nicer homes get listed and spring, so that skews the data to some extend.

Preventative maintenance like dryer vent cleaning and fireplace maintenance are some of the best ROI's by extending the life of major systems.Glad you mentioned contracts.

The % your choose will depend on your risk tolerance but I like ~20% buffer for holding costs if your timeline gets extended and ~20%+ for your rehab for the items that the home inspection or walking the property doesn't catch that inevitably pop up.Hope that helps!