You cannot do a 1031 exchange because it is a flip.I recommend that you discuss this with a CPA familiar with real estate to see if there are ways to structure the deal to minimize your tax.

I have about $42,000 saved with minimal knowledge on real estate investing.

@Steven WilsonI could handle a small down payment if push comes to shove but in an ideal world I’d like to minimize my initial outlay.

Minimal shopping around has shown most conventional lenders, that offer competitive rates, look for 25% down.

Is it all in creating a margin of error and a really good deal? What are the best way to do that? Is it other things outside of the “numbers”?I am a first time flipper and I am very confident in what I would like to d...

It will add slightly to your long term costs but not the end of the world by any means as the costs will be very minimal. 

Is there a way to convey them to minimize tax consequences? 

Try to find a home that needs only a small amount of rehab work to get it to the same condition as the other recently sold homes in the area, and that would eliminate your two biggest risks in my opinion (have a strong understanding of ARV and a minimal rehab budget to get there).3.

We have insurance, but last time I checked, insurance companies don't like to pay claims.Since we don't operate property management or rehabbing businesses, our exposure is minimal, but I still want to discourage attacks.Seems like having assets in your personal name is just asking for trouble. 

How much can I expect to pay in fees to minimize my personal outlay of time?