@Hank Bank BRRRR is probably want you want to do.Buy, Renovate, Rent, Refi, Repeat.Before you go all in and either find out you don't like being a landlord or you make costly mistakes, start with just the next one.You'll have some challenges with tapping the equity in the townhouse:1) What loan amount can you qualify with your credit & income?

If Don fails to pay, the bank will certainly go after me, it will at least ruin my credit and will likely take me to court.

Let's assume your expenses (mortgage, taxes, insurance, maintenance, vacancy, etc.) comes to a clean $600 and the property rents for $1,000.

Are you quoting net cash flow - after taxes, insurance, maintenance/repairs, property management if needed? 

You may be able to deduct mortgage interest and property taxes before the property is in service. 

Also, I believe the tax benefits are horrible compared to the states, but I'm not too sure.

If it is a credit/equity line, you could provide a lender letter that the funds are available immediately for funding - and cured any recission period. 

What's even more frustrating than asking the IRS help desk, is asking a Turbo Tax "Tax Specialist".

Home went to tax sale county kept excess proceeds.

Focus on tax-saving strategies such as cost segregation studies and bonus depreciation to accelerate deductions.By qualifying as a Real Estate Professional (spending 750+ hours annually and materially participating), you can offset your wife’s S-Corp income with real estate losses, reducing your tax liability.