He’s aware there is likely a tax implication on the income of the LLC but main concern is if becoming a part owner would affect his eligibility for capital gains exemption thru 121.

The preliminary report says we would be eligible for ~$390k in eligible deductions.

However, as the owner you still need to spend more than 50% of personal services and more than 750 hours on the real estate business on your own.Alternatively, short-term rentals are generally treated as active business income and therefore are eligible to offset w-2 income.Navigating the Real Estate Professional Rules"When measuring material participation, a married taxpayer is required to count any hours performed by his or her spouse, even if the spouse does not own an interest in the business or if no joint return is filed.32 While this rule is advantageous because it makes it more likely the taxpayer materially participates in the real property trade or business, it is a trap for the unwary in the real estate professional context, as discussed below in Step 3.""

Make sure you work with a lender before looking for a deal to ensure your buy box will get you a property eligible for financing. 

Assume 20% is personal property eligible for bonus. 80,000.

USDA can go out to 20 and in some cases 30 years, though not every location is eligible for USDA.I'm currently working with a lender in GA for my FBO sale. 

They all look very solid, fundamentally-sound, have clean lines, and are very attractively priced.

You have a major advantage because like you said, you are able to utilize your VA eligibility to get your foot in the door.

Added benefits of FHA Programs: if you qualify to purchase the home, after you make six on time payments you'll be eligible for a FHA Streamline (feel free to look these up, but the gist of it is: if the market drops 0.5% for mortgage rates you can refinance without an appraisal and without income verification).Advice: Start reaching out to Real Estate agents in your ideal area and be transparent.

Out of state investors continue to flock to the area.Shoot me a message with a good contact number and we can chat.Shawn @Shawn Costley, I wonder if you have some analysis of the fundamentals behind a sustainable RE growth in Huntsville?