There's really more to it than that, but it would take 10-15 minutes worth of talking to fully explain, which is a little too much for a forum post.The sale or exchange of the dwelling unit requirement that you're reading in both the majority and the dissent of Gates is in effect an anti-abuse rule to prevent someone from engaging in behavior such as: buying land, putting a mobile home on it, then moving the mobile home to a new lot and selling the old lot every couple of years while utilizing the Sec 121 exclusion on each lot sold. 

Said property can not engage in any prohibited transactions with you or a family member

Has anyone experienced this before and can tell me if this is an acceptable way of engaging him?

And finally while we hear about flashy deals, most folks make money years down the line - once rent has caught up with the mortgage payment and appreciation is where its at (at least where I am) it is a get rich slow game :) RE is the single best way for average people to build wealth. 

It's a very fun and engaging way to build capital if you are smart about it.

If I locate off-market properties in my neighborhood and find out who the owners are, what's the best strategy to engage them?

Tenant PoolThe only way to consistently make money is to keep the property occupied by what I call a good tenant, who:Has stable employment in a market segment that is very likely to be stable or improve over timeHas a credit history with which you can evaluate the likelihood that they will performPays all the rent on scheduleTakes care of the propertyDoes not cause problems with neighborsDoes not engage in illegal activities while on the propertyStays for many yearsGood tenants are the exception, not the norm.

Lastly, it would be best to start engaging in the RE community in the Greater Boston area to hear what people are doing and how you can emulate their business model. 

Now, even if you try to bring on a buyer's agent, you have already started engaging with the listing agent, and you could have an issue trying to bring in a different agent.  

A taxpayer who engages in frequent and substantial sales is almost inevitably engaged in the real estate business.