Yes, that's a problem.As this thing has gone on, I realize that "AI" cannot be taught business ethics. 

I'm starting to realize that investing is something I want to consider learning for long term as I spend more time in this industry.

A smaller paid off portfolio seemed a lot easier to manage so that is the path I was on.. but I've come to the realization if I ever want to accumulate serious wealth I will have to use leverage and scale big. 

Part of the investment thesis was getting it for a bargain, then building an ADU complex on it as affordably as possible, getting it to cash flow, and realizing value on both the rental income but also property appreciation given the work going into it.If the property will really only be worth ~$1.70M once we are finished, I will likely just stop the project now and exit the house as soon as possible.If you do not get dollar for dollar for projects such as this, how would house flipping ever work?

I realize you're starting out so it may be a while before the lucrative legal projects appear but if you enjoy your field they will because you will get very good at it. 

Now the paper losses are still able to be realized via the holding companies while the management fees are earned tax free?

I realize I don't have the actual NOI, but that price sounds super high for the gross income you're stating in your narrative.

Again, large commitment of time, patience, and ability needed.The amateur of “semi pro” investor should realize that the professional investors (such as myself) spend ALL DAY EVERY DAY doing the above.  

Then one day I realized when I pointed at people I saw 3 more fingers pointing back at me.

@Makani Donaldson it all depends on your investment goals.If you buy a Class A rental, it'll usually have negative cashflow, which will be hopefully offset with appreciation and better tenants.If you buy a CLass C or D rental, it should have pretty good cashflow because you may not realize much in appreciation and you'll have a lot more problems finding good tenants.