Investors cannot defer the gain resulting from the sale of a property that was purchased with the intent of rehabbing the property and reselling it. Courts look at a number of factors to determine the purpose of buying the property in order to qualify for deferral of gain under Section 1031 of the IRC. Some of these factors are the use of the property at the time of sale, the business of the property owner, improvements made to the property and how many properties the Seller has sold in the past.
Attached is an article by Marie Flavin, Esq. who is one of the most experienced attorneys when it comes to like-kind-exchanges.