For two reasons:1) you’ll gain valuable landlord experience which will go a long way with a lender in he future. 2) you’ll build equity which will you can use to leverage future deals. 

I also purchased mortgage notes and invested in an apartment syndication as a passive partner.

I'm interested in buying Bay Area property off market to rehab but then live in it for a couple years to capture tax advantage with the gain when I sell, then repeat.

A few answers to questions that I have seen asked on a lot of similar posts are:Our end goal is to make at least $6,000 a month passively by the time we are 35, and live somewhere it doesn’t snow.I do not plan on staying in the military, but obviously that could change depending on life.I do know a few people who have a little experience in real estate and quite a few people who have extensive knowledge in every area of construction.I am currently obtaining my bachelors in IT management and may get a job in that field to help fund this but I would prefer not to if possible.Thank you in advance

In my opinion, you need to assume you're going to have to pay the capital gains tax when you're comparing different scenarios.

Okay, let’s see how these same properties work for them, assuming everything else is the same:Essentially, they’ve created a $30k annual earned income on these 11 properties, which can be used to pay executive salaries, and passed on to shareholders as dividends—and they’ll earn another $300k in capital gains if nothing extraordinary happens--and remember, AH4R alone has over 50,000 homes in 22 states.It sounds like a license to print money.Risks do exist for these REITs, though.

Thomas Marshall I am sure it is, the challenge will be what position are you in 1st or 2nd and if your 1st then getting s lender to be in 2nd with 100% equity will not happen and then if your in 2nd your money is at high risk.If your looking to be passive either be a hard money lender or invest in mortgage notes.

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.