If you’re confident your investments will generate enough losses to offset most or all of your W-2 income for the year, in theory you could reduce withholding significantly.Just keep in mind that the losses only exist once the properties are purchased and placed in service, so timing and detailed documentation are key.

Quote from @Joe S.: WELL almost anybody and their grandma can get a contract.

But reducing debt by paying taxes isn't always optimal.One thing you could consider would be to purchase the first replacement property cash and a mortgage on the second property, kinda like @Jason Wray had mentioned.

My experience is that offering less than what's normally expected will greatly reduce the quality and  number of prospective tenants interested in your rental.

A good plan will show how to structure things like your wife’s business, potential rentals, and depreciation so everything works together to reduce your overall tax burden while transitioning away from W-2 income.

Quote from @Steve Wilson: I'm getting ready to start investing in the Port Huron market in SE Michigan and had a question about depreciation; I spoke with a CPA who told me that unless I'm a Real Estate Professional, I can only use depreciation to reduce the taxable income from my investment property, whereas Real Estate Professionals can use their real estate income to reduce the taxable income from their W2 job as well.

Having higher deductibles can reduce the payment.

An S-corp on top can make sense for active income (flips, wholesaling, property management), but it doesn’t usually reduce tax on pure rental income and can add payroll and multi-state filing complexity.With multiple states (NC/SC/GA/FL), you’ll also want to factor in state filing and nexus before stacking entities.You’re smart to think about protecting assets and your 22% bracket, but I’d model a simple version first (just LLCs + your current return) and only layer in an S-corp if the numbers and activity level really justify it.

Wouldn’t house hacking reduce returns for a passive investor or lender?

Spending $50K over budget upfront could break the BRRRR math.If leaving $50K in the deal significantly reduces your cash-out refi or increases your payback period, that defeats the BRRRR strategy.