Here are the 5 basic steps:  First, you must define your niche and develop your business plan.

The last month's rent can be paid over time. 3) I include utilities in my lease and I think I need to define what that includes.

to give me an initial idea of what we're dealing with.I have a hunch that the damage will be more than the FMV of the house...I have to believe this is $50k+ worth of damage by the time you factor smoke and water damage, plus electrical and structural components.

This is one of the key components I have learned from developers 30 to 40 years into the business versus my 14 is to assess what it is you are doing, timeline and risk to get to the return you want, and then decide if it makes sense to take on the risk or structure an exit a different way ( or not do the deal at all in any way,shape,or form and move to the next property).  

One of those games is to dial up your depreciation by breaking out certain components like appliances, carpets, concrete etc.

Tax payer is going to be defined as the entity filing the tax return that reports all of the activity of the real estate. 

Now you have something pre-defined and agreed to before hand. 

The key component is the title.

with total disregard to the individuals acumen to real estate or financial condition or abilities which as we know is a huge component.. some do quite well paying for these expensive courses and its just like the 1 million member BP club..

This section prescribes rules for tracing debt proceeds to specific expenditures.Treas Reg §1.163-8T(a)(4)Treatment of interest expense(i)General ruleExcept as otherwise provided in paragraph (m) of this section (relating to limitations on interest expense other than the passive loss and nonbusiness interest limitations), interest expense allocated under the rules of this section is treated in the following manner:(A) Interest expense allocated to a trade or business expenditure (as defined in paragraph (b)(7) of this section) is taken into account under section 163(h)(2)(A);(B) Interest expense allocated to a passive activity expenditure (as defined in paragraph (b)(4) of this section) or a former passive activity expenditure (as defined in paragraph (b)(2) of this section) is taken into account for purposes of section 469 in determining the income or loss from the activity to which such expenditure relates;(C) Interest expense allocated to an investment expenditure (as defined in paragraph (b)(3) of this section) is treated for purposes of section 163(d) as investment interest;(D) Interest expense allocated to a personal expenditure (as defined in paragraph (b)(5) of this section) is treated for purposes of section 163(h) as personal interest; and(E) Interest expense allocated to a portfolio expenditure (as defined in paragraph (b)(6) of this section) is treated for purposes of section 469(e)(2)(B)(ii) as interest expense described in section 469(e)(1)(A)(i)(III).Treas Reg §1.163-8T(c)(4)Allocation of debt; proceeds deposited in borrower's account(i)Treatment of depositFor purposes of this section, a deposit of debt proceeds in an account is treated as an investment expenditure, and amounts held in an account (whether or not interest bearing) are treated as property held for investment.