The medical school and law school students have been good tenants for us.

If you do qualify for the Solo 401k then in my opinion this option is more superior than IRA LLC for several reasons: No need for an LLCNo need for a custodianAbility to borrow against your account using Participant Loan Feature of the planAbility to make Roth contributions and invest tax freeSignificantly higher contribution limit (up to $59,000/yr per spouse)Exempt from UDFI tax on leveraged real estate (this is a big one if you are planning investing in real estate using non-recourse financing). 

She could sell the unit she lives in and move to the other building, then she would get a personal exemption for part of the gain the amount depends on if she i married.Not sure if a single person would get 250k exemption or 1/4 of that since it is a 4 plex.  

Fannie and Freddie are governmental entities now so, they have some exemptions.

It has been, and continues to be, a much more      geographically broad-based recovery, thanks to a broader array of economic      drivers, including energy, agriculture, medical services, manufacturing, trade, transport and high technology—all of which have been more widely spread around the country.

They ended up with medical complications causing them to move out in less than a month.  

We are looking for turnkey multifamily units near medical centers, military bases or colleges.

They invest in medical use buildings and special equipment using the specialized knowledge that they have that many normal investors might not understand. 

Are you doing an attic exemption (little to no more structural cost) or a full 3rd floor?

I know if it was my primary residence (which it is not), I can get the $250K exemption - Tax Free!