Where will they get money for food and other necessities once HELOC is depleted?

Hi Jason, For conventional loans concerning rental properties reported on your PERSONAL tax returns, underwriters will calculate your net rental income based on your Schedule E from your most recent tax return (using Fannie Mae form 1038), depreciation and depletion can be added back in to offset the expenses of the property.  

I suppose that requires a second (or third or fourth) opinion, but if he's right, where can I pull cash from to both complete our primary home, and refill the RE emergency fund I'm currently depleting?

Simply switching the right refis on or off you can see NOLs accumulate or deplete and the impact on returns. 

If they did go into a bank account it was to reestablish a liquify reserve that had been depleted - so interest rate would not be relevant here.

If money is only going out and none is coming in, your savings can deplete very quickly.Best of luck!

Oil and gas wouldn't be what it is without the government taking on much of the risk through the intangible drilling costs tax credit, and the depletion allowance act deductions, and literally hundreds of other tax benefits, loopholes and direct subsidies plus the fact they have access to public land to be drilled for pennies on the dollar, and the government cleans it up once they're done. 

Once you choose your depreciation schedule, you cannot modify it mid stream, you are on that path until you either sell the property or deplete the depreciation life of that component. 

Do you recommend self managing in PS (or even Indio) where tenants may be a little more high maintenance:) I ask because PM fees can be anywhere from 20-30% and will deplete any cash flow we may generate. 

Otherwise, you are gradually depleting your security deposit and you have nothing left when they move out.Capable PM software is complex, some of them you literally have to take classes.