If the property qualifies as a separate activity, you may be eligible to claim bonus depreciation through a cost segregation study, which can provide substantial upfront deductions — particularly beneficial if you are in a higher tax bracket.However, if your income level is lower, the cost of the study may outweigh the benefit.

And was the potential combined rental income of both units considered in the income approach on the appraisal or just the main unit?

Use an S Corp for flips or management income to cut self-employment tax.

That means more cash flow, faster pay-back, and smarter reinvestment.What Is Cost Segregation & Why STRs BenefitCost segregation is the process of breaking down a property’s purchase price (or renovation cost) and reallocating portions of it into shorter depreciation lives (typically 5, 7, 15 years) instead of being lumped into the standard residential/structure life (27.5 or 39 years).For STRs (especially where average guest stays are short and you materially participate) this becomes even more powerful:It accelerates write-offs and frees up cash sooner.It helps you convert your property into an “active business” rather than passive income in the eyes of the IRS, making more deductions usable against other income.Personally I'm a realtor which makes it easy to gain "material participation" as I am classified as a "real estate professional"There are ways to structure a property that is managed by someone else and still qualify.

Hey @Scott Green,From a tax perspective, keeping your mortgage might still work in your favor since the interest is deductible against your rental income, lowering your taxable income.

My question is, should I get an associate brokers license as a way to make side income, (or Main Income) as I invest in properties, or would it get in the way if it becomes my main source of income? 

We started doing a debt snowball on everything this year. and over time our income will double.  

You’re right—traditional loans are tough when you’re newly self-employed, so DSCR and bank statement loans can definitely be good options to look into since they focus more on property income or cash flow instead of your personal income history.

Doing option #2 would mean that I would likely need to leave more capital in the house in order to achieve the same cash flow, even with rental income being $100-$200/higher per month. 

That portion of the project is valued at about 729k, so it added a strong income component and long-term upside to the deal.