There are several different types of income in the US tax code.Two main types are “active income” and “passive income".Active income is money you earn from working, such as wages from a W-2 job or income from running a business.Passive income is money you earn from investments like real estate, stocks, or rental income from your RE portfolio where you earn $ without actively working.Normally, you can't use passive losses (like losses from real estate investments) to offset active income like your salary from a W-2 job.That is unless you are an RE Pro.The reality is, that Real Estate Pro status is just a filing status similar to filing married or jointly.And if you are a real estate professional you CAN use passive real estate losses to offset active income from other sources.To qualify as an RE Pro you must:1.

@Tyler Speelman There's no issue if you want to convert your STR into your primary residence and live in it for those two years. you would qualify for a 121 exclusion which allows you to take the first $250k ($500k If married) of the gain tax free. 

I will only mention two critical points:- People with regular full-time W2 jobs cannot qualify for REPS (unless their no-W2 spouses can qualify)- REPS has nothing to do with STRs, and vice versa3.

If you're doing a 2nd mortgage on your primary residence to get the cash for down payment on the new Quad, then you're looking at needing to qualify with DTI unless you find a lender who is a DSCR lender and not a traditional conventional loan lender.  

I been watching some videos where the get a 5% down with FHA loan but I don't think I would qualify.

Since you are an active service member the IRS will allow you to have lived in the property for two out of the previous ten years of owning it. you'd just want to verify with your accountant that you qualify for these extensions.Since you converted the property to investment, you may also take advantage of doing a 1031 exchange when you sell.

After that it’s best to transfer the property to an Ohio tax deduction qualifying entity.

This might be a dumb question but would it be possible to use my significant other as my "roommate" to qualify for a house hack?

There are multiple ways to qualify for "material participation" but this would help to keep someone else under 100 hours. 

Legally, the GPs take on the liability of the project including things like signing on and qualifying for loans.