Of course, if you then generate additional taxable income, that is something you can work to mitigate with your CPA.You could choose to form a self-directed IRA and invest the money directly into real estate.  

That will generate a massive tax bill.

Finding it difficult to run numbers and get a solid feel if the condos I'm looking at will generate the interest needed through the year.

And for the same reason we don't put table saws in our living areas (yet) its stupid to put dishwashers, mixers, blenders, and other noise generating kitchen equipment in the same room.

This is a good model but doesn't account for a return of the $500k your parents will contribute..For example if the property generates $10k per month with $6k in PITI & operating expenses the proposed return for your parents would be: $2k and $1k for each of the minority partners.

Joshua -No.If the property was not rented and did not generate any rental income for the tax year, you would not be able to claim depreciation deductions against your W-2 income for that year.Thanks.

the easiest way to cash flow - to generate net cash - is to put more down. 

BRRRR opportunities can be a great way to build your portfolio and generate passive income.

@John Morgan. 400k house would generate $2200 in monthly rents.

If you don't, then you have to take the owner's word for the amount the unit generates.