If not, then I "just" have to pay taxes on the difference (net sale of the old home minus purchase price of the new home)- Can I use the closing cost amount of the old and new home as part of the tax free money I can spend from the 1031 exchange or these closing cost are purely out of pocket amounts?

There is also usually a battery hit since they are always running in the background waiting for a call.

I actually think it's ignorant to believe one is truly better than the other.It is inaccurate to simply compare purely numbers for ROI.  

My gut tells me that military presence might not be a big benefit to the pure flip model.I think military tenants are a great way to go, especially when you can attract a little bit more senior folks (E-4/5+ and O-3+) with families.

I recently took action and bought my first pure investment property in Pensacola (from overseas).

Approach it purely from the aspect of trying to protect the assets and common areas that everyone has ownership of. 

Consider adding any of your properties to be offered by reserve auction.Study the market, have a plan, know your spending limits.Form an investors group, pool cash for more buying power.As an investor always be prepared to do business.( keep contract offers with you, blank checks, screw gun, flashlight with good batteries pens and blank addendum).Wishing you good luck and successful investing. 

And no it is not just pure speculation to invest in CA real estate ... there is a science to it and done properly it is highly repeatable.

,I agree the stock market may be correlated and not necessarily pure causation.

Out of pure curiosity, how did you sell the deal?