This is an example of private lending which is different than the IRA owning real estate and does not trigger UDFI/UBIT tax.

How do we minimize taxes on the profit we're making on this first home? 

Lenders will want to know if the property is generating income and if it qualifies for a DSCR loan or traditional financing.

IMO cash flow provides a way to mitigate the risk of unexpected expenses and loss of income due to vacancies.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Tax and Legal ConsiderationsUnderstand the tax implications and legal responsibilities associated with rental income.

Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  

Again, replaces previous active income. 

I'm going to reiterate what's already been mentioned above, but I'm going to actually give you examples of why it's relevant to you to find a U.S. tax professional.1 - You're going to need to file U.S. taxes once you have property down here, there's federal filings, state filings, and sometimes local filings too2 - Tons of tax treaties between the U.S. and Canada that are easy to miss and can cost you a lot of money (important one with rentals - effectively connected income - if the professional you talk to doesn't know what this is, run away)3 - The amount of days you spend in the U.S. needs to be tracked and if you go over a threshold, all of your worldwide income could be taxable by the U.S.4 - Selling real property means up to 15% of your sales proceeds might not be available to you for years (FIRPTA)5 - Lots of nuance at the state and local levels, which both want to take as much money from you as possibleMain takeaway here is that you should find a U.S. based tax person.

If one spouse stopped W2 work in October and qualifies for REPS, the depreciation becomes non-passive and can offset your $700K income, saving you significant taxes.