It is very challenging unless the tenant is willing to go live somewhere for a short time it is really difficult because they will get annoy with living in the midst of construction unless you work out some incentive with them .

It doesn't work out to free but your own portion of rent will be really low but you get the advantages of principle pay down, appreciation, tax writes offs (depreciation), etc.Keep looking as there are deals that can  net you 0 rent for yourself in the greater Phoenix surrounding area. 

I've run the numbers a bit on building a multiplex new, and it doesn't seem to work out very well.

If we are able to work out our number such as increasing our down payment in such a way that we get minimal positive cash flow and obviously just wait for a few years for appreciation to work its magic, would that be a good reason to buy now?

Those are details you can work out with the seller. 

I tend to listen to them when i workout. :)

Well, any neighborhood can be good for rentals as long as the numbers work out.

But if the numbers work out better to rent and invest OOS, go where the money is (as long as it lines up with your long-term goals).

After going round-and-round with a few difference national providers with awe-inspiring promises (only to be shocked by the real offerings they have) I came to terms with a local bank that is going to beat the terms from the nationwide "investment lenders" and are going to be a solid long-term partner in investing.The national players might work out better for you, based on your local property values or some other factors, but I'd recommend connecting with a local bank and finding a win-win opportunity with them.

Realtors are used to 3% which wipes out spreads - Set it up in a way where the seller pays for the commissions or work out a flat fee with the realtor.