House hacking lets you live in the property, have tenants help pay your mortgage, gain hands-on landlord experience, and even write off a portion of expenses like mortgage interest, repairs, and utilities.Using your VA loan is definitely a good route as it lets you get in with almost no upfront cost (which is awesome), and if you go the live-in flip route, you may qualify for the Section 121 exclusion, meaning up to $500K of gain can be tax-free if you’re married and live there long enough.

@Jeremiah DunakinAt least ask pre-qualifying questions and state your criteria up front.

If you do chose to do it yourself, you'll have to establish house rules, hire staff who are qualified to work in the recovery field, and likely network with rehabs and recovery support groups.

When filing jointly, if one spouse qualifies as a Real Estate Professional and materially participates, the rental activity as a whole can be treated as non-passive for the joint return.

Once you pass that point, it’ll have been more than three years since you lived there, and you’ll no longer qualify for the exclusion.If you sell before March 2026, you can likely exclude up to $250k/$500k of gain from federal taxes.

Most of my properties are Class A or B and my criteria is such that most tenant applicants are either qualified to purchase a home already or will be soon. 

If the property qualifies as a separate activity, you may be eligible to claim bonus depreciation through a cost segregation study, which can provide substantial upfront deductions — particularly beneficial if you are in a higher tax bracket.However, if your income level is lower, the cost of the study may outweigh the benefit.

The current tenants are interested in buying it and pre-qualified for a mortgage, so my hope is to be able to sell it directly to them without paying a lot of realtor commissions if possible. 

It’s technically possible to qualify for Real Estate Professional (REP) status with out-of-state rentals, but in reality it’s very tough to pull off.

I'd gladly take $7.5k for a simple formality of switching to an S-corp, wouldn't you?