While that kind of income is not a deterring factor, when I looked over the terms of service many big red flags came up.

When you sell a property that has been depreciated, the IRS requires you to "recapture" the depreciation deductions, taxing that portion of the gain at ordinary income tax rates.

However, you can get loans that are based on the performance of the rental and not your personal income and debt.

Just make sure you use a very honest agent that doesn't sugar coat anything and check the crime statistics and household income.

The house I will get is in a lower income area, currently worth $95-100k, and she still owes about $25k on it.

You can Host Finacial revenue tool to get an average of the income.

As already mentioned, you could sell via seller financing to lower AGI, as all you would have to claim is the payment income - until balloon payment received.Did know an investor that had 14 properties paid off and he moved into one every two years to then sell with the $250k single exemption.

Who knows, when you get down here you may be happy you have some extra income coming in. 

This aligns with my interest in passive income.

If your goal is passive income, it's not going to be in New Jersey when you factor in cost to purchase, management costs, and rent to price ratio, but what you can get is steady appreciation.