Even before only every 5th deal or so would truly allow to recycle all cash and generate 25% equity. 

It is my understanding (per our zoning attorney) that RT4 zoning should allow 3 units but whether the current construction of the building makes that viable or not is an issue.Not an expert by any means - just our experience with zoning and digging out basements in Chicago.

But lets say they do allow you.

I am currently a junior business marketing major with a concentration in professional sales at Samford University.

EBR housing allows around $1,300/month for 3 bedrooms.

When picking a market, I would look for things like population and job growth, rental demand, and economic diversity—basically, is the area attracting people and businesses?

They have to allow them in to inspect to make sure things are copacetic.

Selling gets a tax free gain and allows you to be more liquid; keeping it allows you to have once in a lifetime cheap debt and have that leverage on an appreciating asset. 

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

Use this partnership as I way to learn how to crawl in the house flipping business.