This isn't directly related to 121, but bears on it.From the Gates conclusion: "If a taxpayer sold some part of the underlying land but not the dwelling that the taxpayer used as a principal residence, the taxpayer could not defer the recognition of gain on the sale because the taxpayer did not sell his or her principal residence. . .If petitioners had sold their old home instead of demolishing it, they would have qualified for the section 121 exclusion.

However, you can explain that you already have experience/know what to look for if things are going wrong, and have a vetted Pm that you already use and is capable of taking on the additional units.It sounds like you have already put some thought into what you are looking for and just need to polish that off so you can develop an elevator pitch and longer presentation to get some interest in a deal.

I don't have an IRA- but as a teacher I have  (in addition to a pension) a TDA which is a Tax-Deferred-Annuity which pretty much is a retirement account that gives me fixed 7% return on my money.

I agree with @Joe Funari, If you don't want a big tax bill and are interestedin continuing in real estate investing you need to consider a 1031 exchange which allows you to sell investment real estate and buy replacement investment real estate and indefinitely defer all tax on gain and depreciation recapture.

That one set of terms is not how all lenders will present theirs, and you will find a lot of variety.

I'm actually presenting on ADUs and how valuable of a tool they are right now in the Missoula market.

Present them to landlords?

If we put that towards the down-payment, that would present two scenarios. (1) buy a duplex up to $2.5m  - assuming we rent out one unit for ~$4500 / mo / unit.(2) buy a triplex up to $3.2m - assume we rent out two units for ~$4500 / mo / unit. 

I did review a formal inspection that was completed within the last 2 years and aside from some age related and climate related issues, it seemed to otherwise present satisfactory.

My advice for the process would be to present facts, not emotions.