Or buy a duplex in your current location with the owner's unit large enough for your family, and rent the other side, thereby reducing your cost of the larger house.  

Is there anything I can do to reduce taxes paid on the capital gains from appreciation?

If you "use" those funds, even if you have to pay for them,                       with multiple uses, you only have to pay once for them...which means the cost/use is                       reduced with each use.C - Understand that money isn't a noun, it's a verb, and when it becomes a noun for                   you...you lose, but the most important of all is....D - Learn the meaning behind this sequence of numbers................................                                                1073741824

Would this reduce the seller's tax liability?

Your out of pocket expense can be reduced significantly if you choose that path.Would welcome the opportunity to provide assistance for your family.

And it would be even better if you could sell the 4 to the same buyer, to reduce cost and uncertainty.But, in effect, your Replacement Property for each of the 4 Relinquished Properties would be a  1/4 interest in the new property.Hope this helps.Michael Lantrip

I am thinking to the future, trying to compound my money with time.I'm looking for any advice locals can add to my strategy, or any points I am missing.Some odd points:The reason I would like to keep around the universities is because whether or not in the future the market busts (if you believe the market is bubbling or plateauing) or the Navy expands (adding ships increases the jobs for a time then reduces after need is met), people will always go to college, meaning my first property I plan to keep for some time. 

This means that equity sitting in a income property is reducing your cash flow not increasing it.When you can stick cash in a mutual fund and consistently earn 7-10 return why pay down a 5% mortgage.

I wouldn't live thereI don't see this as being a way to financial freedom unless you can accomplish two things:1) Reduce your lifestyle (pay off your personal home, get out of debt, reduce expenses to the basics)2) Own your properties free and clear.By leveraging yourself into your next rental, you're reducing your cash flow.  

Centralizing the monitoring for wells can reduce the stress of keeping a reliable water supply.