I am looking to purchase real estate for both investment purpose as well as to offset as much tax liability as possible. 

Taxes: Be aware of potential transfer or capital gains taxes, depending on your state.4.

I didn’t see your location in your profile or your post, but assume at least 17% state/federal taxes leaves you with $10k/yr. 

@Brad Kanouse Using Traditional IRA funds for an investment property typically incurs income tax and a 10% penalty if you’re under 59½, as investment properties don’t qualify for tax exemptions.

Any tax pro who is familiar with REI will be able to help you.

Now, this would obviously be negatively cash flowing since you would need to pay taxes and insurance.

(As AZ and your current state will fight over who gets to tax your gains with the federal government.)I have to throw most of the shade on your horrible tax guy/cpa who didn’t tell you renting it out was a $50-$100k mistake. 

Forming an LLC for your rental property can offer liability protection, but no real tax benefit.

There are less taxes in Alberta too.

Is $107k your true net, or do you have any other expenses (mortgage, taxes, lodging taxes and fees, insurance, utilities, landscaping, WiFi, etc.)?