I know of many people getting into REI using wholesaling as a capital growth strategy but that's not for me and I think I would really enjoy this specific strategy you are talking about here to be honest. 

Well kind of an obvious but I don't see it specifically mentioned in your analysis... which of those cities cash flow?

Not mentioning your age can effect your answers. 

In our market we have one city that gives the voucher holder her/his own bedroom and separates the sexes for anyone over the age of 10 into two people per bedroom.  

When I have previously checked into this with my accountant it seems their are very specific tests to pass to be considered a materially participating passive investor, namely that you must spend half of your time and at least 750 documented hours in passive real estate to qualify to deduct depreciation. 

Does anyone have any recommendations regarding an NJ specific online pre-licensing course that they have used?

I'm a big believer in finding a niche that works for you in your market and your specific needs.

Specifically, how can I determine the market value at which my condo’s property value will be capped?

Assuming Illinois doesn't have state-specific forms that are different, look at paragraph 6 of the deed of trust that any owner occupant who got any 30YF Agency loan signed at any closing table within the last 5 years. 

How it will apply specifically to your building is unknown.