However, this has to be the primary residence of everyone on title in order to qualify and even if that were all true, we're still only up to $1M that way.I agree with the other commenters, the parents should continue to own it and live in it as their primary, leave it to the daughter when they pass, and she inherits it at the stepped up cost basis. 

I do understand all recent syndications are struggling with costs and tenants struggling to pay, so trying to be patient for now.

Given the latter costs, a corporation can be the best solution only if you buy multiple properties.

You'll likely also reduce your cost of living by moving to a stabilized apartment.Depending on the cashflow and debt paydown, you can use this strategy until you've built enough equity to reinvest.On the other hand, getting into a multi-family after refinancing will also help you build substantial equity to rinse and repeat in the coming years.

For example, should we focus on acquiring one high-quality property in a strong market, or would it make more sense to spread the investment across multiple lower-cost units in emerging areas?

At that class of property, the turn overs are costly. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Those costs are a lot higher than you might expect.

Debt service is way up, revenue is generally down, down payments are way up, financing terms and costs are much worse.The time of fast scaling has passed, unless you're very creative. 

It's great for cashflow and our entry level costs are lower than a lot of other markets.