You should be able to claim the ENTIRE mortgage interest as they let you on primary homes.

It merely means you will likely have a difficult time refinancing the property to a traditional lending source.

For lenders, I have access to private money lenders or if you want to go the traditional route, I recommend checking out Coast to Coast - Jeff Weller. 

Too many varying opinions with sound logic on both sides in this forum regarding traditional velocity banking.First position HELOC ... 

Going in, I have a HELOC that I can draw about 60k from my primary and then 25k in cash.  

Traditional lending doesn't lend on C5. 

My primary goal is to identify properties in high-demand neighborhoods, with a focus on value-add potential.

Now, lets talk about BRRRR and a primary.

Refi the house so they can continue to live in it, they will get the best loans on their primary residence.

You would only pay taxes on all passive investments in a traditional SDIRA at distribution, unless you have a mortgage, then the portion of the income derived because of the mortgage will be subject to UDFI (unrelated debt finance income) which will trigger UBIT (unrelated business income tax).