If so, they can sell within 2 years and not pay capital gains taxes on the sell of the home.They could take that money and buy multiple rental homes in other areas if they wanted, or use the money to downsize in to a different home while still having money left over.

Hi @Heather Bailey something to consider with this is legal mother/daughter may not mean legal duplex. 

Consider the "2 of the last 5 year rule" to avoid capital gains.

If you want them to leave, provide them legal notice to leave.

What is the legal mechanism?

I think you will gain a lot there. 

Seek legal advice, however, what I understand is that there are really two way to wholesale that is legal in the state of Arkansas.

I'm quite not 100% on wether or not if I purchase my first investment property where I currently live (Virginia) (*which I will be*). should I also gain my license here since I'll have a property within Virginia.

.: I haven't passed this past legal review so for what its worth: Part of my standard requirements for everyone include income is at least 3X rent, minimum credit score, say 640, Clean record and no evictions as well as deposit is paid in full at signing of lease and 1st month rent is paid in full prior to handing over the keys.

This is after-tax money though, so doesn't really do the same but gives me some tax free gains down the road.