Dig deep into tax strategy, tax efficiency, etc  Learn about estate planning. 

Is it fair that the county can raise property taxes due to a strong market?

For several reasons (property taxes, politics), I would prefer to begin real estate investing somewhere other than locally. 

It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

Assuming property taxes + insurance added don't go above $1,100 total, you could maybe make this work. 

Assume my marginal income tax bracket is very high, and mortgage rate is 5.25%.

Baselane has the added advantage of synching with your Schedule E you'll use at tax time to file your taxes.

The interest would be tax deductible due to interest tracing rules. 

@Brice Alef-Torrisi putting each property in its own LLC is usually overkill.Getting a bank account for each LLC is typically something you need to do to avoid "piercing of the LLC corporate veil" (actually depends on tax selection you made for LLC), but is also overkill.You haven't indicated how you are holding the deed for the latest property.If in your name or same LLC, you don't need a separate bank account.If in separate LLC, you can create a Master LLC, have each property LLC hire the Master LLC to manage their affairs, and just get a bank account for Master LLC.This is an opinion, not advice, so lookup CPA Frank Alcini in Troy for expert advice.

Technically it would be best to get a C Corporate or S Corp. to flip properties and since you are considered a dealer if you do several properties a year and this could have negative tax consequences in an LLC.