I have all the income and expenses.

My plan is to funnel the rental incomes from all three properties, along with my W2 income, back into the HELOC while covering all expenses from it as well.

FHA’s self-sufficiency test applies to 3-4 unit properties, meaning 75% of the rental income has to cover the full mortgage (PITI).

This could reduce your help lower your taxable income if the investment aligns with your lifestyle goals.

That would allow you to put down less knowing you have that income coming in.Otherwise, is it possible to consider moving somewhere more affordable so you can reach that financial freedom you want? 

Rental gives $500 monthly income from $2,000 rent.

K1s show your share of income or losses from the partnership, and you include it on your respective personal tax returns.Now, to your partners.

Getting a property with a partner / friend will not help you from getting hosed on taxes.I wouldn't move forward - You mentioned beng a high income earner so your hourly rate is very high.

One thing to be aware of is the FHA multifamily self-sufficiency calculation which determines if a property can generate enough rental income to cover its mortgage payments.

You still claim the income as miscellaneous income and deduct property taxes and mortgage interest (subject to SALT and other high mortgage limitations) on your Schedule A, but that's it.2.