I've only invested in STRs and was looking to get into small multi-family but haven't seen anything that made sense in any of the markets I invest in so was curious where people were seeing good opportunities.  

Just ask the owner what are you going to do with the money if you sell for cash??

Personally I wouldn't feel comfortable trying to wholesale a relatives $1M home knowing that I am breaking the law if I cross over into doing anything that can be considered representing them in the transaction, and knowing it will only be marketed to people who buy properties wholesale (typically investors who don't want to pay retail prices), instead of the majority of retail buyers active in the market who are typcially willing to pay more. 

Give them all a call and see if they are willing to sell and if not are they in the market to buy.

Ah screw it, you can sell it for the same amount right.

So if you buy a 5 bedroom house and rent the spare 4 bedrooms = you can still sell tax-free under the 121 (you just pay back depreciation) If you buy a duplex and rent 1/2 and live in 1/2.

The one guy I spoke with said they make money only when they sell to potential investors and they only sell new construction homes that are usually pre-leased to buyers (currently they are building in Texas state and Missouri State).

if you believe this is a common outcome I have a bridge to sell you.  

If you decide to sell I would sell it vacant.

I don't ever recommend selling a property unless (a) you want to move the income to another investment that will perform better, or (b) selling moves you closer to your goals.