However, it seems like a waste to stick all of it into my bank account and make 1% on my money and lose money after inflation. 

There is no guarantee that the 600k ARV you're estimating will be there in 2 years so I wouldn't bank on inflation and appreciation like it's a given.

Also, your cost of doing business (taxes, insurance, etc) is going to increase 2-4% for inflation so why lock yourself into a 0% increase in revenue.The way I would do option 3 is charge $1,100 (market) for the first year and some higher rent for the second year. 

At 24000+ miles per year driven, the inflated price of used trucks, and the fact that we use them for business AND kid hauling/family duty, buying used didn't make business sense after running numbers on a long term cost/year basis: we would simply kill higher mileage used trucks before they made up for their cost.... and I know since I killed three used vehicles running my business before, kept good records, and examined what they truly cost me to keep on the road including diminished value when they were traded in broken.

Take advantage of these low interest rates, before any significant inflation has hit.  

While I may enjoy inflation adjusted debt destruction, I do not like the idea of owing more than I started with.  

Rents here have not kept up with inflation, but there are some areas that support a little higher rents. 

It's much too rich and too much grey area (how would he know you aren't inflating costs/etc)0-2 points upfront, 8-12% interest with a 4-12 month term is standard for hard money.

My goal is early retirement after paying for my kids’ college, but I want to have something to do and keep making money after I retire, so I started looking into REI.I own a small rental in SF Bay Area, but this market became very inflated and I’m thinking perhaps I should 1031 out of here.

Inflation, why not?