If you want safer investments, you give up a greater potential reward.Betting on appreciation in the future is a lot riskier than analyzing current cash flow and making an investment based on that, but it could end up with a much greater return as your family friend noticed.It all comes down to what is your risk tolerance, and what are your goals.

But as far as future capital gains, the appraisal value would be my basis?

Well, Future welcome to you Ms.

Another assumption would be that I already have a couple investment properties that are cash flowing well to give me some extra income for future purchases and that I am 24 years old with my whole life ahead of me.

Just my advice that I think could protect all of you in the future.

In the future when I wish to purchase another property as a personal residence or investment, what is the most efficient way to do that?  

I am looking to repeat the process on a multi family house in the near future but the owner occupied rules are throwing me off.Thanks again!

In the future, I strongly recommend talking to your CPA first because that will preserve more tax-minimizing options.It sounds like you are going to pay a lot in taxes, unless you have NOL or significant deductions.

We have a property in Memphis that is generating $7,000 dollars a year in net cash-flow (property is 100k).We want to buy another 3 properties free and clear BEFORE we refinance them, to group them together and LLC them.However, we want to know IF we can get a HELOC loan first from this property (or others in the future) BEFORE asking to refinance them?

I’m trying to stay a bit conservative with my future predictions for this particular area.