We currently own two homes, our main residence has an in-law apartment that we rent out on a short-term basis because we are in a tourist area.

So our primary residence is under my name, our second home (Ocean City Beach House) is under my husband name. 

It turns out to be a 3 year violation notice on the property I did not know about when I purchased this property as my primary residence.

@Ben Boss When you are  buying 1st property as primary residence you don't need landlord experience.

So the question is what are the flaws in the following deal for the owner of a principal residence and the real estate investor?

Only problem I ever heard of was back in the day some condo associations didn’t have enough primary residence owners and the whole complex would be off limits. 

Hi BP,I have a question when you have over $500K in gain when selling your primary residence.

But - I do hear that we get to avoid 500K of Capital Gains taxes since it's been our primary residence for 4 years.

Since it was going to be our primary residence, our standards were probably slightly different than they would have been if it were just an investment property, but we found that most multi-family properties in the Houston area are being town down and replaced with townhomes.

Based on our research, more than 50% of its residents are renters which bodes well for a fix and hold property.