Total Profit if Sold: I just can't seem to get the numbers right!

Boot is what the IRS calls profit that you take from the sale. 

Begin to generate $500/month net passive income with Buy & Hold investing.

I am thinking my strategy should be to approach a family member to lend me the money for a down payment and then take out a hard money loan and either do a profit share with the family member or 10% interest or something like that. 

if the Market Cap rate for this property is lower then yours by at list 2% you have some build up equity and could possible sell at profit.

This way you can use the equity from your existing home to generate additional cash flow.

Which scenario makes more sense, with $75K cash available:1) put $25K down on three separate SFR (in the mid-west) all priced at approx $100K each, that generate net cash flow of about $300 each = $900 total cash flow per month, or, 2) put the $75K down on one, nice $300K home, in a rapidly expanding market (LV, for example), in order to take advantage of the projected growth in the housing market over the next decade, even though there would be minimal, if any, cash flow while renting it out in the meantime. 

And they’ll use our profits from this property as income to approve us for our next property rather than having to wait the typical 2 years for it to be considered income.

This gives you leverage to either sell for profit, or refinance for cash out to do another deal.

Any profit split varies depending if your relative just gives you money or also helps you physically.