Invest in multi family to offset w2 income tax along with bonus depreciations

[Will Park]

Hi everyone!  Heard many good things about this forum and would appreciate any sound advice.  I’m very nervous about this next move and would like some input from those of you seasoned investors. 

My wife will be quitting her full time job to focus on real estate in order to qualify for professional status to write off depreciations. We have two small investment properties currently. She wants to get a multi family house next. Huge step up. There's a 4 unit multi house here in NY for 1.8m. We would have to tap into HELOC at 9.3% and all of our savings and still be at 10% down payment + probably 60k of closing costs and fees and taxes. The renters will cover 80-90% of the mortgage granted there aren't issues or long gaps in renting. Meanwhile we can take advantage of depreciation write offs on my w2. I make around 200k+ so I do pay quite a bit in taxes. She said our first year taking advantage of the bonus depreciation would offset my taxes. Then every year after around 30k lower in taxes.

The math seems to work if everything goes according to plan. However, rarely does everything go according to plan in life. Is this too risky? Or does the benefit outweigh the risk? 

[Basit Siddiqi]

if you are making $200,000, your federal tax is prolly around 18%(blended between 10% /12% and 22% / 24%)

That is about $36,000 is tax savings at the federal level. You may also save some state taxes depending on your state of residency. 

Being able to claim real estate professional status does provide a lot of benefits if you qualify.

There are some risks / concerns but the benefits are great.
1) Your spouse will be spending 750 hours which is about 15 hours a week
2) There is a risk that the quad that you purchase decreases in price(It can also make you very rich if the value goes up).

Note: I find it that normally the higher the cost of the house, the less likely that you will get close to the 1% rule. If you are far away from the 1% rule, it is unlikely that you will be cash-flow positive.
A lot of investors need to put 40% down to cash-flow in this market. If you are putting down 10%, this is inconsistent with with a lot of people are finding.

Are you factoring in putting money away for capitalized costs?(Roof, HVAC, etc)