I do not have to do anything right now, I just need to learn, wait for the right opportunities, or create them - for example by trying to use subject to and take over someone else's payments who locked in a lower interest rate from a few years ago. 

Selling the property within your Solo 401(k) and returning the proceeds to the account simplifies compliance and ensures tax-deferred growth (or tax-free in a Roth Solo 401(k.)).

Note if monthly rent is 0.5% purchase ratio, the property tax will be ~20% of the rent.  

How is it a tax strategy though?

There are, of course, also things like politics and tax policies preventing the New York side from developing its tourism sector to be on par with Ontario... 

The Big plus is the tax deductions they will be able to take as well!!! 

Your best advice would come, for a Tax Advisor NOT a Tax Preparer (CPA).

Instead of $500 off the first months rent, have you considered lowering the rent by $40 dollars per month?

It's an awesome way to jump into RE yes its scary at first but as long as you have a criteria going in it eases some of the emotions during the process my biggest thing was lower my cost or keeping it the same.

Stationed there almost three years, sold with profit and tax break for how long we lived in the house.