If it is a turn key property managed by a property manager or you have limited interaction with your guests it would most likely be considered passive income and filed on a Schedule E

We started with flipping to build enough cash to start buying income producing properties and have decided STR's is the way we want to go.

With capital gains if you file together I thinks it’s $250,000 that’s exempt but speak with an accountant for sure.  

Hi, the lender will likely not know what his entitlement is at this time, if the loan has been in place, the entit. will be in the loan origination package which is now in the repository, the loan file will simply show the amount of guarantee.You can figure it though if you know the beginning LTV of his loan, and VAs go up to 100%.

While the bank may have facilitated the transfer without issue, updating the title is still important for legal and liability reasons, particularly for tax and asset protection purposes associated with LLC ownership.The title company has indicated they can handle the title change process, which typically involves filing paperwork with the appropriate local government office, such as the county recorder or registrar of deeds.

This means cash flow is producing 4.3% ROE.  

Remember they can add 75% of the potential income that the small multifamily will produce to your DTI ratio. 

One often overlooked item for those who invest in Ohio is not filing the locality returns.Ohio is a unique state where they require locality returns to be filed in addition to the state return.

Quote from @Bocondo Williams: That's the problem with free software: they eventually have to generate revenue, then they want to produce profit, then they want bigger profit.I think most software is going to charge $1 or more for every ACH payment.

You will also need to understand how to file taxes properly, potentially in both locations, and you will probably need to travel there from time to time, most likely when you do NOT want to go there.