Can we use our current investment propeties or purchase another investment property purchase to at least slightly offset the tax hit?  

number of tax parcels, number of physical buildings?

In small college town with high rental demandAsk price 745kGross rent: 9750/mth 177k/yr     (differed maint properties with potential 200/mth per unit increase once renovated) estimated reno (190k across portfolio)NOI: 91,475/yr   (12.6 CAP)    (includes tax, ins, listed maint for past yr)     After reno NOI 127,475/yr   (14.6 CAP) Deal info:    - Owner finance 745k 20yr at 6% 20k down minus deposits (~13k)Cashflow  = 2100mth     (self-managed) (self maint similar to the previous owner)By this alone, 2100 cash flow added per month, it will put me at my financial freedom number of monthly cashflow is equal or greater than my families spending amount.

What are everyone’s thoughts on purchasing properties with tenants in place currently paying below market rents?

I rent it out as a vacation home to others too... this helps pay the bills.

3) Price is too high for prospect perception of property value--- Prospects are only willing to pay so much for what a property is.

Our neighbors in Maine have not paid their taxes in a few years.

My plan is to move out in two years after I qualify for the possible capital gain tax exclusion so then I can either decide to keep it for 3 additional years (or maybe longer, and forgo the exclusion)and move the home into a LLC.

I reside in NJ, have been looking for a multifamily around my area (Newark, NJ) and have recently been going to Philadelphia/Allentown area of PA because the taxes are so much cheaper there.  

Consulting with a tax professional can help ensure you meet all IRS requirements and maximize your tax benefits.