Even for 1 year to gain equity 

Equity is no more than paper gain until you pull it out through a refinance or sell.Another good target for acquiring properties with equity is through unsophisticated sellers...Frank

I stood to gain nothing.

Looking to gain a better understanding of real estate markets in these cities, and strategize for purchasing rental investment single or multifamily properties, under $300K. 

Good luck and remember...nothing ventured, nothing gained. 

If they only take the second year into account then maybe it would be best to claim a loss the first year and a gain in the second.

While you can't take any passive losses now due to income, you will accrue them, carry them forward, and be able to either use them to counter future gains down the road or use them to lower your capital gains when you sell.

I need to gain capital once I've acquired capital,  I plan on using in a "subject to" investment.

Good day!!I am trying to get started in the real estate flipping sector of Investing. Currently I have no initial start up money. How or what is best method for creating capital to make my first purchase. 

From what I have read from some of the research I have done it seems that Wholesaling would be a good entry point into the market to help build some capital and gain some experience in the market.