As much as I regret not buying 3 years ago, I think the appreciation opportunity here is far from over and will outweigh taxes and inflation (Am i wrong?). 

The largest unit i will rehab such that i could split it as 2 units in the future but in the mean time it will remain a single unit.

If he was able to get financing on that much debt and make the monthly payments to service the debt, and inflation was 6 to 8% annually, he would be making $60,000-$80,000 on paper each year.

Let’s say I have a deal for $1m called Property C and I want to use the $200k as a downpayment and finance the remaining $800k.Could I pay the $200k of pulled out equity from Property B LLC to Blue Capital LLC then use the money to create and contribute to Property C LLC and purchase Property C so that Property C LLC is 100% owned and manager managed by Blue Capital LLC.

The 126k to purchase is the closing costs, down payment and rehab estimate.You have no money left in the deal because the Refi minus the remaining mortgage is approx 131k, then subtract the money spent on rehab, down payment, loan fees and closing costs, you break even. 

Every person is unique and different and unless you hold securities licenses or are a CPA, I would remain extremely broad.

Adjusted for inflation, S&P 500 (aka C fund) was at 2179.89 on Jan 1, 2000. 

Then estimate how long you think you'll live after 40, tack on inflation each year and that might get you a vague estimate of how much you'll need.The better question is, do you truly want to be retired at 40?

So the only question that remains for me is this.

Here’s the applicable law from your state:TENANT’S RECOURSE FOR WITHHELD SECURITY DEPOSITSIf the landlord does not either return the entire security deposit or send an itemized list of deductions, along with any remaining portion of the security deposit, within the required time period, the landlord forfeits all rights to withhold any of the security deposit.