So with my end goal being to own multiple rental properties generating cashflow here are my questions:Should I start rehab in the spring and try to list right at the 1 year mark to only pay short term capital gains or wait the full 2 years and pay no tax?

You will be losing all the equity you may or may not build.The FHA 203k loan program is a bit different and does not limit your gains.  

You can easily lose capital gain rates, plus there is the issue of refinancing.

One strategy would be to create a metrix to identify those properties of yours that would yield the greatest amount of cash but have the least gain and that you've owned for the shortest time (but still over a year so the gain is capital not ordinary income) so that your depreciation recapture is minimized.

More young professionals are moving to the downtown area and PLENTY of projects are on the booksFor example: http://www.cleveland.com/business/index.ssf/2015/1...Cleveland is a market where there are plenty of gains to be made of course buy in the right area thou

Gain good will whenever you can.]

If they do exercise their option, I don’t mind rolling the capital gain into another house or apartment building on a 1031 Exchange.

With the IRS approved Solo 401(k) Plan, roll over your existing IRA or 401(k) plan funds tax-free into a new Solo 401(k) Plan and use those funds to make tax-deferred investments, such as real estate, while also gaining the ability to borrow up to $50,000 as well as make annual plan contributions up to $59,000 – almost 10 times the amount of an IRA."

it is exactly what I would like to do while I gain the experience and the right capital to go full time investor.

ThanksRizAdvice would be to find someone smarter/more experienced than you and make sure they have something to gain out of the situation.