As a general rule, I tend to vote against anything that favors rent control and will increase property taxes.

Would the federal tax liability be $140k at year 5 for the sale, with long term capital gains (ignoring any Net Investment Income Tax)?

The Big plus is the tax deductions they will be able to take as well!!! 

If you use a DSCR loan you could maximize the equity you could take out while still breaking even on the mortgage + taxes + insurance.

This in a neighborhood that is slowly appreciating, some renovated homes mixed in with older homes, but is street by street:Purchase price: $130,00001% rule: meets about 0.88% Down payment 20% and closing costs: $29,493Rate: 6.99% conventional 30 yearMonthly payment PITI: $1009 (was $859 until property taxes increased recently) Current rent $1200 (increased from $1150)Property management fee 10%: $120 (was $115) Net cash flow (if no repairs called in): $71 (was $176)Net rental income most months: $170 (first month rent), $935, $922, $1035 (full month rent minus PM fee) $567, $760, $307, $963, $1035 (full month ), $535, $925, $1035 (full month but now property taxes increased), $585.

A real basic guess is 30 houses each cashflowing $1,000/month.In Metro Detroit, this means $1500+ in rent, with the difference convering taxes, insurance, maintenance and vacancy - NO MORTGAGE!

Lower taxes, no POS and lead testing. 

Account ClosedI recommend that have a consultation with your tax accountant and/or financial advisor on ways to reduce your taxes. 

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

When you add purchase price, carrying costs for at least 6 months, materials, labor, real estate agents costs and taxes, do you have at least a projected 10% profit?