If the answer is yes, then it's a no brainer to make minimum payments on your 2.8% interest rate mortgage, and use the funds that you would have paid extra to pay it down faster, to either invest in more real estate, the market, or anywhere else where you can get a ROI > 2.8%.If the answer is no, then feel free to aggressively pay it down as fast as possible, to become debt-free faster, and just have a large amount of money in savings or to splurge with.The bottom line is that your 2.8% mortgage is GOOD debt.

I was going to do that in an attempt to get creative with my financing options so that there are no liens on it and I could borrow against it as an option.

Always consult with a qualified tax professional before making any tax-related decisions.Depreciation losses will have no effect on your financing options. 

If he kept the house, then your statement would be correct, because there is no immediate taxation of insurance payout.

There's no workaround for bringing it in house.

Anyhow, thanks for your reply and to answer your question no, currently I do not have anything else going on that will help. 

There is no current tax on rental income and capital gains.

Quote from @Patricia Steiner: There are several lenders who offer low/no closing cost options for first time homebuyers.

Suggested to do that earlier than later, so there is no liability on a tenant who is not on the lease paper.

No but I attended their 3 day event that was $300.