I look forward to learning and gaining knowledge. 

I agree that gaining hands-on experience in property management before fully diving in is crucial.

Secondly, the extra $5k you have to come up with yourself - EVERY time - eats into the benefit.Hint: The useful purpose of applying for a HELOC is to gain you instant CASH (to invest)!

I would like to add what qualifies you are a short term rental investor that can take advantage of this "loophole" below: The short-term rental (STR) tax loophole allows property owners to classify rental income as non-passive, enabling them to take advantage of certain tax benefits even if they don't qualify for Real Estate Professional Status (REPS).

Should I offer this guy a 5 year plan to help him save on capital gains?

Personally, I don't see many BRRRRs that make any real sense in the neighborhoods I would be willing to own in, but I passively look at the MLS, so take my comments with a grain of salt.  

If you said I would add an extra 5K to the bottom line, that would be something to think about.. 950.00 you are not even doubling your passive income, so I would say no to this one. 

If your income is below the $150,000 AGI limit you will be able to use up to $25,000 of the passive losses (if any) to reduce your income and therefore tax. 

For more passive income, research local markets, financing options, and property management strategies.

When your rental produces a loss in excess of income (AGI) you have a passive loss.