You realize this gain when taxes come around.

@Jason JamesInvesting a self-directed IRA or a solo 401k plan in rentals is another way to diversify your next egg and all the gains grow on a tax-deferred basis.

My thought was to spend some time, using my license, learning the industry and gaining knowledge of the area, while generating the necessary capital to eventually go that route.I know the Arizona School of Business and Real Estate has job fairs every so often, and I believe the next one is at the end of the month, which I plan on attending.

You benefit from their experience, and they benefit from you pounding the pavement to find the deal.

You will gain experience being a landlord by renting out the rooms and dealing with tenant drama, home repairs, etc.Then in a year or so fully rent out that first property and repeat the process.If you don't want to actually live with the other roommates then I would look at an area like Hyattsville, MD and parts of Silver Spring, MD where a lot of houses are two level houses and often times with a second kitchen in the basement.

Next year, we would like to sell one of our smaller properties (a 4-plex) and do a 1031 exchange to defer capital gains taxes.

From my previous learnings, my initial strategy is to invest in a duplex and "house hack" while gaining more experience to invest in additional properties. 

If it was bought on a VA loan, you can sell on a Mirror Wrap and you will benefit from the offset of the payments.

The only benefit to a lease option, really, is that you can charge them rent plus additional for the principal balance, force them to pay the taxes, and take care of the property.

Some of the comments in this thread mentioned that the CO/unit only looks into it for the benefit of the military member.