If the free rent were considered a gift or was taxable that could be a complication.2.

The property taxes are being reassessed yearly and probably you will only get the new taxable value 12 to 18 months after the purchase. 

(I'm looking into following the million in net worth plan from the book)When buying a property for a low value ex: a duplex in Cisco TX for 95k and probably cheaper.

We deal in low income properties, so our criteria is that rent cannot be more than 50% of income, but if the income source is non-taxable we increase it to 59%. 

(I'm looking into following the million in net worth plan from the book)When buying a property for a low value ex: a duplex in Cisco TX for 95k and probably cheaper.

Why aren't they buying the property you are considering right now at a cheaper price?

To be "lendable" as you say is more about cash flow than actual taxable income.

Every payment, including down payment and monthly payments, will have 3 parts: taxable interest, taxable capital gain and tax-free return of basis.

Your taxable gain / loss will be sales price less cost to sell less your adjusted basis.

also i've mentioned in that Ashcroft thread, that some of the bridge-loan lenders have intentionally created conditions where they approve the loan so they can bankrupt the GP/LP syndication for cheaper assets to acquire.