But when it's equity gains, no tax, only at time of sale and if you 1031 Uncle Sam let's you continue to use that tax-$ for investing purposes.

@Emily Gowen so as you pointed out you would not have to do a 1031 exchange on your current home to avoid the capital gains tax and coupled with what Dave Foster pointed out I think, speaking from experience you would have a high likelihood of success. 

With everything paid off, they’re looking to slow down but are hesitant to sell due to capital gains considerations.Purchase Price: $1,750,000.00Downpayment: $400,000.00 - Will do a 1031 - Selling two of my SF properties for the downpayment (bought for 120k + 146k back in 2017 & 2015). 

Quote from @Shaun Ortiz: Hi Jason,Thanks for sharing your journey—it sounds like you’ve gained some invaluable insights from your experiences, even with the squirrel tenants (that’s definitely a story!).

This will provide insight into making informed decisions and accessing the benefits that these properties offer.

If my business owner bank statements did not gain me an approval, I was going to go the hard money route.

Nothing illegal about doing that, but if caught, the lender may call the loan due and if you don't correct the situation or pay the loan off, they willstart mortgage foreclosure.3) You could also go the HELOC route to tap the equity in the home, but the 12-month owner-occupancy will also apply AND the interest rate on the HELOC will fluctuate with the Fed Fund Rate.4) You could do a cashout refi as an investment property, but that will be at an interest rate 0.5-1% higher than owner-occupied rate.Suggest you meet with 2-3 lenders to explore your options about the above.Once you have access to funds, recommend you buy a 2-4 unit with 20-25% down. - You can buy owner-occupied, live in one unit, and fix up and rent the other unit(s).- If you're handy, recommend buying a property in the worst condition you can tolerate.

After two years your only profit will be the education you gained. 

Rental income is subject to tax, but it is also possible to deduct many costs related to owning and maintaining rental property, including property management fees, repairs, and mortgage interest payments.Additionally, for those investors holding properties in Germany for the long-term, the country's capital gains tax law is attractive.

I'm curious as what y'all consider to be the minimum criteria for approving a tenant, assuming you don't have access to professional tools.