Simply buy new homes, by completion you generally have 10-20k in appreciation.

Sounds like you have a great little investment starting here.

I completely agree that gaining experience by working for another firm and learning from seasoned professionals is crucial.

Sounds like he has something. 

. * [6-24 months] Whenever I find a job and qualify for a FHA multifamily, get that property (with break-even cashflow most likely), and rent the condo at a cashflow loss for a couple years until rent increases (due to high-interest on underlying debt)* [Almost immediately afterwards] At this point, do a cash-out refinance on the condo to pay back the SBLOC (unsure if this is possible immediately after getting the multifamily loan), and secure a lower rate for the condo itself.I know this strategy sounds like loser, as it bleeds money all around, but my hypothesis is:* Underlying assets should grow more than 8.15% in a given year, and I would not pay short/long-term taxes on stock.

I would go on to facebook and find STR groups for your location(s) in question and see if there is a way to get a license already held by someone else, or if they are just completely off limits.

Honestly, A reverse does sound like the best option for them 

I'm talking to a real estate lawyer tomorrow for some guidance, but in the meantime I'd really appreciate any advice about this situation, as I'm completely confused about what to do here.  

I'd need to know more information to determine myself if I were assisting you (hypothetically, of course, since we aren't allowed to advertise our services through this medium), but from the surface level it does sound like you do qualify for the 121 exclusion.

But it sounded like a no brainer if all I had to do was secure a property.