I have a followup question - I will realize a lot of capital gain from this home in Idaho, so I think unless I purchase a new primary residence I will have to pay that capital gains tax. 

It won't take much money to purchase something that makes sense.Use the remaining money to invest long-distance.

Purchase price: $255,000 Cash invested: $51,000 Second property, bought soon after the first multi-family.

I wouldnt give any consideration to what the seller needs in order to break even in determining the purchase price.

Assuming a 340k purchase price that would be 34,750 out of pocket.   

We've essentially ruled out investing in our local community because we can't seem to find a good deal (we live about 1.5 hours north of NYC, so purchase prices are very high), so we are considering (1) investing out of state; or (2) investing in some northern NY localities (Syracuse, Albany, Rochester, etc.). 

I purchased the property roughly 5 years ago.

Also, what is your price range for a purchase and are you looking for turn-key or a fixer upper?

Financing depends on your scenario and what type of property you're purchasing.

This would allow you to indefinitely defer all of the tax if you sold, and use the tax you would have had to pay, to purchase something nicer in an area with a greater growth potential.