You must (and should) depreciate investment property whether or not you are actually able to take advantage of the deduction for income tax purposes because you will be subject to depreciation recapture tax as part of the gain calculation whether you took a deduction for depreciation or not. 

@Dave CieslickiIt shouldn't matter but I don't wanna buy a property and then not be able to resale it and get stuck with the property tax as well.

Thus, I pay income tax, as well as self employment tax on my gains.

Your tax, as long as you've owned it one year will be 15%.

For example, if you finance 40% of the purchase, roughly 40% of your IRA's net rental income after exemptions will be subject to this tax.

Build it into the rental price and pay the tax, or do I have the tax as a separate line item like your example of buying a tv?

If the LLC owns real property in CA or the manager lives in CA, you are doing business in CA and must file the return and pay the tax. 

Fix it up quickly, start living there paying below avg rent for Fells Point, rent out the other bedroom for that ~$1400-$1500 number that you suggested and then live there for 2 years to avoid capital gains tax as a owner-occupant, selling the home for $350K or more capturing ~$35K in profit from appreciation.Our company, Four Twelve Development, works as a contractor in Baltimore City.

Unless you're using an FHA that requires 3.5% down, you're going to have to front a lot more money than 5% for a downpayment.Assuming: you buy for $175k and rehab costs are a very modest $10k (Loan ammortized at 30 years, 4.5% APR)Rent is $1360 as you say it isProperty tax as you say it is8% for Vacancy8% for Capex8% for RepairsJust factoring these things in, you're almost at -$100 cash flow per month.

This may be a minor point but the government will not come after you unless you do not pay your property tax.