I have a friend who lives in California but is licensed in many states including Puerto Rico to do mortgages with Sunwest. 

We understand there is a limitation on how long you are required to live in the property to keep your homestead exemption.

You want to work with a professional who will understand whether the rehab that you do would be required to be capitalized and depreciated over years or eligible to be expensed in the current year.Furthermore, you live in New Jersey which has one of the more complex tax laws in the country.

I currently own and live in one side of a duplex I picked up just over a year ago.

You're not looking to replace your job and make really good money, plus you live in an area that isn't ideal for buying locally.

The downside is that I give up the freedom to live in whatever neighborhood I want to - I could only afford a handful of neighborhoods further out in the boroughs.

Well people in real estate make a living trading their knowledge for money. 

I am hoping to buy within the tristate area (NY, NY, PA) but am open to purchasing out of state if the situation works out, as I may not live here forever.

If well engaged, why wouldn't you buy a 2-4 family and live in one of the units?

While you can’t completely control who applies to live in your properties, you most definitely can find areas that are popular with students, young professionals, families, etc. 4) just as important as finding the property, you need to have an exit strategy in mind for the property.