But as stated probably not for tax purposes for the seller. 

NOI Underwriting Methodology: NRI and EGI, real estate taxes, operating expense underwriting rules of thumb, replacement reserves, appraiser’s impact on lender underwriting, expense comps, etc.10. 

I am looking to purchase real estate for both investment purpose as well as to offset as much tax liability as possible. 

I know I'm getting the tax benefits of depreciation, the minimal positive cashflow, and the appreciation on the property, but It's pretty much a long term play of slowly raising rents annually to increase cashflow, which will eventually get basically reset when my loan goes P+I in 10 years.

There are two reasons this is a bad idea.Investing with an SDIRA (assuming it is not a Roth) will often result in paying significantly more taxes. 

So all of the gain and depreciation recapture are initially still tax deferred.However, like Joe said, the down side is later when sold  you lose the 1031 option. the client will pay tax on all gain and depreciation recaptured from before the 1031 also. 

example:Purchase Price: $70kRehab: $30kARV: $200kRent: $1,500I can pull out up to $150k but with taxes and insurance I’d be in the red.

Low property taxes (1.1%) and not a lot natural disasters as well.

The sellers you are dealing with in these situations don't deal with prorating Taxes, or any other kind of prorations, that is what an escrow agent does. 

If you think ahead, you can minimize recapture with the right tax planning.So what is recapture?