The IRS is concerned with the tax return that is reporting the activity of the property. 

There are houses that can be lived in and fixed up, or turned into multi-unit spaces (such as terraced houses with converted 'stables' at the back) for living in and earning income at the same time.

ended ended up at retirement with 0 - $500,000 in net worth from real estate investing.  

I have called some local lenders (I prefer to deal with local banks if possible), but have not gotten very far.

-AdrianI am quite pleased with my Capital Square DST.

My partner and I put on some investor forums monthly in Scottsdale, great way to connect with other investors.

@Kamal Sukhija...agree with @Henry Clark; he's one of the best on here. 

They are locked in with a 6% interest rate on a property that we went above asking price on.

The main thing is making sure your investments produce a return that outweighs the cost of the borrowed money.A full cash-out refinance could work down the line, but with rates where they are, you’d be trading a 6.25% ARM for something likely higher, now that it is not an owner-occupied property, which may not be worth it unless you really need the capital to scale.

Generally, the downside comes with added complexity with partial disposals among a few other things.