Whenever I read investor posts about unit count goals and utilizing section 8 rentals as the vehicle to scale a portfolio it loosely translates to buying real estate without paying attention to the fundamentals in the markets where they invest.

Is it better to use "involuntary conversion provisions to take a deferral of the gain on the loss of the previous roof assets and continuing depreciating the prior assets as is"?

This is not a "real estate rental income" activity as defined by the IRS, so whether you are a REP or not, you can take this benefit.All of this is separate from a QOZ Investment, which would require you to first recognize a capital gain from another source (say a stock sale), invest that gain, hold it in a Corporate or Partnership structure (likely partnership), meeting the substantial improvement qualifications of being a QOZB, and then yes, you get to avoid the depreciation recapture at the end of the 10 year hold period, at least for the portion of your investment attributable to the original gain that you invested in the project. 

You will have earned $90,000 in rent income and gained $34,000 in appreciation after five years.or...Buy four houses with $50,000 down on each.

I thought this was strange, and they commented they wanted to buy it because they had a large gain and wanted to buy it to offset these gains.This was an immediate red flag.

Everyday that the property is vacant you lose money that can never be gained back.

This is a fantastic place to gain some insight into the REI world, particularly for those starting out. 

Lastly, if the home has appreciated at all, taking advantage of Section 121 and taking capital gain exclusions is just another strong point towards selling within the 5 years if you've lived there for at least 2 years. 

Even the modest 4% annual appreciation equals wealth gains far above any monthly cash I can make on a rental.

Having been in the lending space for a while now,  Interest income is not passive - its considered/taxed as ordinary income- just like interest you receive from your bank and savings account.Regarding profit and expenses from a flip, "that depends" on many factors but again if its short term capital gains, its not tax friendly.As always consult with your tax advisor / CPA.