At a high level, this is generally the path people take - we see a lot of people have success in this route - start building the portfolio with banks, low down payments, and then **generally** when you hit around 5 or so properties - it starts to make sense to switch over to LLCs, its too hard to qualify/deal with paperwork of banks and switch towards private lenders like DSCR Loans - (LLC friendly, easier) to scale past 5 or so.

Depreciation can create paper losses to offset rental income or passive income, and qualifying as a Real Estate Professional (REPS) or STR loophole can allow losses to offset W-2 income.This post does not create a CPA-Client relationship.

IF you cannot qualify for a full doc loan then a DSCR loan does NOT look at your returns.

They say by 2028 the percentage will be closer to 30-40% of people. based on those numbers 500k plus 3 mil plus I suspect less than 2% of all folks in the US would qualify and maybe less than 1%.. 

You can compare both options and see which makes more sense with the rate you'd qualify for.

I am not qualified to say how it should be done.

@Nina Ning I do not play detective or require past rental payments to qualify for my units.

There are so many misleading "gurus" and advice from others online - that don't make logical sense.Who do you think qualifies for an S8 voucher?

The best strategy depends on your goals, but here’s a breakdown:Selling outright would result in paying capital gains tax and depreciation recapture, but since the appreciation is minimal, the tax impact may be relatively low.Gifting the property to your son could potentially allow him to sell it with a lower tax rate, but since he hasn't used it as a primary residence, he won’t qualify for the exclusion of capital gains tax on a primary residence, and you'd need to account for gift tax implications.1031 exchange could defer taxes, but you would need to purchase a like-kind property of equal or greater value and meet all the IRS requirements.

I've reached out to lenders here on Bigger Pockets- but their rates & terms seem high (DSCR or just not good terms)- I qualify for a conventional loan, but my DTI is almost maxed so why pay an extra 2-3% DSCR when I don't have too.