If not, the income won't be considered. 1.

@Jay Fayz Do you have a source of regular income? 

For example, let's say you are guaranteed a 7% pref and the property delivers exactly that, but then sells with a capital gain. 

It's no guarantee but it's a good place to start.

Good contractors want to be able to guarantee their work, and if you are providing them with garbage materials they can't do that.

I guarantee virtually no one is meeting that rule in SD because they're all on here looking to buy in Cleveland or Detroit because in that market price to rent ratios are so askew that buying at a 50% discount probably doesn't get you the 1% rule. 

The rental income from the first home will pay for the mortgage/monthly costs.  

It has a 90-day guarantee... seems worth a try with that in place. 

--> Passive income doesnt mean tax free income.

@John Zhang If your wife qualifies for Real Estate Professional Status (REPS) and materially participates in managing rental properties, there is no limit on the amount of rental losses, including depreciation, that can offset your W-2 income.