It certainly did for me.I started out buying turn key rentals because they were easy to buy and workedOnce I got more confident, I started rehabbing ugly houses, making a much larger profitThen I started investing passively in multifamily deals, which allowed me to invest big chunks quicklyThen I syndicated a small apartment, gaining experience and building my capitalNow we are syndicating large apartments with large staff and property management.From a percentage basis, the houses I was rehabbing was probably the most profitable, but you can only invest in small chunks and it takes time.

So in this case of a sale/ appraisal it would be a even wash on price appreciation because your lose garage which would decrease value and gain sq footage which ups value. 

Your fact is 100 percent wrong.Sorry, gain of a few 100k over the decade, good catch 

Purchase price: $285,000 Cash invested: $45,000 Sale price: $555,000 This was a slow flip, where we updated every single surface of this place over time and sold it after the time required to benefit from the tax-free capital gains benefit up to $500k, which we did, and put into the next investment.

We are also in the process of selling and moving to a larger home so they are essentially covering our mortgage while we travel.My question is, since our house has appreciated $170k since we purchased it 5 years ago, do we lose the capital gains exclusion if we rent it to them for a few months in the interim.

Have gained $30,000 in equity and cashflows $350 a month.

And how much value are you gaining out of it?

If I hold the lots more than 12 months can I differ the capital gains since I am "buying" a house? 

he is probably thinking of doing a 1031 exchange to defer capital gains and depreciation recapture tax.  

My profit will be roughly $158k.Do I pay capital gains on this rental if my net profit is less than what i purchased the home for ?