I have some liabilities that will be paid off in the next month or two and at that point I will have no debt or assets either.

It is just a very rare case when the money collected at auction would pay for the cost of foreclosure, any debt or past due taxes/liens.

If you use debt, or if you do any sort of active business (e.g., fix and flipping), you'll have to pay tax inside the IRA.I hate to send you off to read, but this is a big topic and there has been a lot of discussion about various aspects.

You should make sure you get the term revenue defined.Does MGMT LLC take on any debt or guarantee any liabilities?

You can amortize the debt or make interest-only payments, but some form of balloon is prudent so your investors are more liquid.

How are they not in debtors prison??

(ie $2M property, $1M cash, $1M debt, new property has to have at least that much debt, or you get taxed on the "boot")Also, there are restrictions on how much larger the property can be, so double check.

Net debtors should do quite well in addition to getting the rent bumps.

Doesn't count at all for either debt or income for both ratios3.

ARS § 33-729.A states, ". . . if a mortgage is given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price, of a parcel of real property of two and one-half acres or less which is limited to and utilized for either a single one-family or single two-family dwelling, the lien of judgment in an action to foreclose such mortgage shall not extend to any other property of the judgment debtor, nor may general execution be issued against the judgment debtor to enforce such judgment, and if the proceeds of the mortgaged real property sold under special execution are insufficient to satisfy the judgment, the judgment may not otherwise be satisfied out of other property of the judgment debtor, notwithstanding any agreement to the contrary.ARS § 33-814.G states, "If trust property of two and one-half acres or less which is limited to and utilized for either a single one-family or a single two-family dwelling is sold pursuant to the trustee's power of sale, no action may be maintained to recover any difference between the amount obtained by sale and the amount of the indebtedness and any interest, costs and expenses."