We are not in a position to qualify for a conventional loan of this size, but have a solid exit strategy here. 

You have built up equity and a great positive cashflow investment.  

Would you recommend I buy my first property as my primary residence now to gain the experience of home ownership or look to buy an investment property (out of state most likely)? 

I have been considering an IRRRL on my primary residence to drop the rate on my VA Jumbo loan, but received a flyer in the mail today advertising 100% LTV cash out (appraisal and income verification required) with the same rate I have seen on the IRRRL product.

What is my position here?

Not worth the risk in my opinion.If you're not in the position to lose that money down and be stuck paying a mortgage and carrying costs, don't do it.

I have started renovations (minimal needed, basically paint) and plan to make the property my primary residence and rent the property at fair market value after my hold period expires (2018).

To all the investors with experience, what would you do if you were in my position?

I am in the middle class and am using the depreciation deduction (and someday 1031) to better my family's financial position.  

Don't let the money languish earning nothing when you can pull it all out at a cost of next to nothing.Better yet sell the property and find cash flow positive properties to invest in.