Each State is different.Some states require you to track the passive losses at the state level.There may be a state equivalent of the form 8582 or there may be a completely different state form.Also be mindful that some states do not recognize bonus depreciation so there may be some federal / state differences for rental income.

Because of material participation (I self-manage)/bonus depreciation/cost seg, we’ve been able to get all of our taxes back both years so far.We cannot keep going the way we have for two years, so that’s not an option.

I think the other commentators have it right - a HML that is willing to take an investment that is small is probably not vettable and not a smart play - however if you have ~$500k or more to put in, then the legitimate more easily vettable firms would pottentially be interested - and you would be able to see the sophisticated setup, documents, structure etc and be able to research accordingly

Proximity to NYC, demand, amenities, and seasonality all play into why those are great.

If you decide to do this, make it a one-off or no more than a few months like a bonus incentive to sign but it doesn't last the length of the lease.Best of luck to you, Paige!

The downstairs has 2 bed, 1 bath, and a bonus room.

Yes I have been playing around with QBO and finding it overly complicated and tricky to setup for STR..I will keep playing around with it but will also check out some of these other suggestions:) 

I read the book Rental Property Investing by Brandon Turner, did some research, played with the buying calculator and rental, listened to some podcast.

That's impressive to find your first deal off market AND to have a creative finance play.

One guy plays for the NFL.