Although I can do the same on rental property but the rental income basically nullify the deductions and I feel like I am paying way too much towards my rent and might as well buy a property and let it appreciate while I pay it down.

There is a great deal to learn about investing that needs to come first. 1) Investing is in income properties is risky regardless of what other may say 2) Education is the key to success 3) A $135,000 property is not going to have appreciation of any significant level.4) Appreciation does not pay your bills

I retire from the military in 7 and half years from now and would like to have some income coming in.

I have heard that Memphis is a good market for rental properties, so the idea of building passive income in that manner is attractive to me.  

Those both sound like great income properties and knowing the construction side will save you thousands over your lifetime!

For example, if a triplex sells in West Oakland for 700k and is pulling in 36k per year in gross rental income (1k per unit, far below market), the gross rent multiplier is 19.5 (pretty high).

@Bob BowlingI was assuming that if the cap rate is the ratio of Net Operating Income (NOI) to property asset value.

It is located in an area I am very familiar with, in a high income neighbourhood on a quiet street near parks, schools and all other amenities.

More of a generalize long term goal is to continue flipping while collecting buy and holds for passive income while I advance my career in the civil engineering field. 

My long term goal is to keep 1 in 5 properties(at a minimum) to create a passive income stream.Do you have some ideas on how to stretch the 200k in my situation or am I on the right track?