You could 1031 out of the property, purchase a new one or something you might like, "Live" there for two years and convert the property to a primary residence. 

I have a primary house in Santa Maria CA that we are renting out and getting cash flow from it,  thinking of using the equity from that house to buy here in Orange County.

Primary residence capital gain $250,000 exclusion.  

It currently seems I’m not going to be coming back to the states anytime soon (given the upcoming projects within the next 3-4 years) but would really appreciate any advice on investment rental property strategy as so to start building the foundation for generational wealth/passive income.We have saved a substantial amount of money  for which the original intent was to buy our future primary residence with all cash if/when we moved back to the states.However, that’s not what’s going to build generational wealth and would rather put that money into passive income investments hence, real estate rental properties.

So much so, that according to AirDNA data there are 4000+ properties on airbnb / vrbo in this destination, though the property that I am evaluating has been used as a primary residence and has no rental history.

Quote from @Rud Sev: Hi Michael,Thank you, I will message my CPA asking for a more detailed explanation.I've been inquisitive with my CPA, but unless I ask question I do not get explanation (and unfortunately not a walk-through), although I've shown interest understanding this further and further.I'll try to reformulate my question more clearer (and with more data) - the problem that I have and will have is figuring out if my questions and confusion are due to a lack of understanding on my part, or my CPA is truly making mistakes.Regarding carry back, thank you for this info.

You have two properties, one of which is your primary residence.

My clients are still buying long term stabilized single tenant NNN more 10 to 15 year type stuff.I am buying with my syndication all cash short term lease blend and extend opportunities.Accredited investor 200k minimum per property for LP'sTypically pay 8 pref on value add deals and split cash flow thereafter 50/50 between LP and GP.Closed on Walgreens last month at 11 cap rate absolute NNN with 5 years primary term remaining. 

Or use your primary residence.  

Down payment can be higher than primary, but the good thing is that you won't need that much income to qualify because lenders can you 75% of the market rents for the units of the property.