Investing in multifamily properties offers steady cash flow, diversification, as multiple tenants reduce vacancy risks and provide consistent income.

All else being equal, lower mortgage rates reduce the cost of ownership and, thereby, allow more people to afford to buy.

So while moving back into it for 2 years does bring the 121 exclusion back into play, that exclusion is reduced based on the percentage of Non Qualified usage over the holding period.  

Increase your earnings, reduce expenses, save up, and invest.

A lot of what you're paying for is free / reduced with Baselane. 

Without the high leverage you reduce the top source of return in CA RE which is achieve via the appreciation on a high leverage property.  

Diversifying your portfolio could reduce risk and improve overall returns.Higher Cash Flow Potential: If you redeploy the equity into markets with higher cash-on-cash returns, you could significantly increase your monthly cash flow.

Is her goal to be nice and provide some of the gains or reduce her taxes by trying to split income between her and her ex?

Many Realtors will suggest purchasing a property using a FHA Loan, to reduce your out of pocket money.

My lease requires professional carpet cleaning, which would cost more than $500 for a home of that size.Yes, it's reasonable to reduce the cost because she was such a long-term tenant.