I’d have so much depreciation recapture and capital gains it would be a real gut punch.

But this may be then most logical option I have 3) I am quickly approaching 45 days and rather than rush into something just pay the damn capital gains tax.

., Arms length to avoid a step transaction would involve retail sales which would cause a recognition of gain anyway. 

If there is appreciation in prices the leveraged portfolio will gain even more quickly 5X as fast and the non leveraged option 2. 

I think house-hacking a 2-3 unit property is a great way to gain acquisition experience, property management experience, lower your monthly living expenses AND possibly even live for free.Your next step should be to find a local investor-friendly realtor to discuss your goals.You'll then need to get pre-approved by a lender so that you know exactly which areas you can target.After you get that first deal, you can refinance after a year or 2, and move onto the next!

If no 1031 he would be on the hook for Recapture Tax on 50K, and Capital Gains on 100K, right?

You would be better off finding a more valuable property that the 18K could be used as a minimum DP on.

I learned a valuable lesson at an early age on this one.

I've been on this real estate investor student path for a while now facing the first time investors obstacle course but stayed in line on what was reachable for me on my journey as a student gaining as much knowledge as could in the process in order to succeed.

Partnering can be a good way to get started, especially if it helps you gain the knowledge base you need.