Since the property is under mortgage, just transferring to LLC will most likely trigger the "due on sale clause".3.

Transferring the property could trigger a lender’s due-on-sale clause, requiring immediate loan repayment.

Quote from @Jon Taylor: @Pete Harper - Section 721 of the Internal Revenue Code allows an investor to exchange property held for investment or business purposes for shares in a Real Estate Investment Trust (REIT) without triggering a taxable event.

I have been looking at it, but have not pulled the trigger on the course.

But we just can’t pull the trigger on anything.

This allows you to invest in real estate without triggering the 10% early withdrawal penalty or income taxes, and the gains can grow tax-deferred (or tax-free in a Roth IRA).

Even then, if you've built up enough carry-forward losses, a nice capital gain may not trigger any taxes to be paid. 

🎯 I get it, though—pulling the trigger on the first deal feels like stepping off the ledge.

Definitely wouldn't trigger the clawback penalty but it's still good to be aware of it.  

This allows you to use the funds without triggering penalties or taxes, as long as you stick to the repayment schedule.These strategies all come with rules and limitations, so it’s a good idea to check with a tax advisor before moving forward.