Also, if you look at the instructions for Schedule A, Line 14, it states that investment interest does not include any interest allocable to passive activities.

Make sure though you have a plan for where you are going to allocate the dollars you are making from all of your hard work. 

That's where it gets complicated because some things can be allocated to shorter lives or longer lives based on their use and the tax benefits start really adding up.

If not, was there a special servicing agreement between the sources to allocate which source was paid first- or in a worse case scenerio how funds were to be dispersed in, say a foreclosure?

This is much higher a payment allocated to my debt-income ratio than what I actually pay.

So if you bought the property for $500K perhaps $25K of that would be allocated to the pool and the remaining $475K would be split between the property and the land value.

Allocate one-fourth of your PMI to each rental unit and one-fourth to your residence unit.  

You allocate that based on square footage, so if all three units are the same size each gets one third of the cost basis, but if the main house is the size of the other two units combined then it'd be half to the main house and a quarter to each smaller unit.

I am prepared to allocate funding from completing transactions, and even if I have to use a portion of the cash flow from an investment property just to keep my license active.I hear you on the support they would offer.

If I am able to find a turn key property, how much should I have in capital reserves to allocate to Cap Ex, NOI, etc.?