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.

Hopefully that upfront diligence plus a healthy contingency budget would suffice to keep me out of that scenario, otherwise I would foresee a guaranteed loss, or underperformance at the very least.

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

That's not worth 15% of the job.Another thing to consider is that some managers will charge low management fees and then add maintenance fees to bring in more income, while others charge high, all-inclusive management fees.

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.

Quote from @Olga Daisel: @Randall AlanI agree with Randall on getting more details, $7K gross a unit btw is a great gross income.

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.