So "Entry level home" means "a larger home but dilapidated" - not "A new, smaller home"
A fixer upper does not necessarily mean large or dilapidated. It traditionally gives first time homebuyers a chance to own a home and build some equity.
I know a guy who bought a larger fixer upper for 60, invested 30 from a heloc, and sold it for 140. That was basically his down payment on his next house. That was a while back, dunno the tax implications.
It obviously does not always work out that way. A lot depends on timing. Same house is probably worth at least 180 on paper now, if a buyer could be found.