.- Rents will be paying the mortgage off, increasing the owner's equity/wealth.- If you hold a rental until death, you can pass it on with a stepped-up cost basis, limiting captial gains if then sold (limited by inheritance tax limitations).Too many newbies on this site trying to replace their day job income via "passive" real estate investing w/o digging deep enough to understand how it really works.

Quote from @Melanie Baldridge: In 2025 the bonus depreciation rate is 40%.This means that if you bought a property for $1M in 2025, did a cost seg study and found $300K in eligible assets that you could depreciate, you could take 40% of that $300K as bonus depreciation to offset your income in the first year.40% of $300K = $120K.You then apply that $120K to the owner’s personal tax rate to find the final amount that they can defer in year 1.If your tax rate is 37%, you can defer $66.6K.This is a big deal even at the 40% bonus depreciation rate this year.It’s a massive benefit 

Cap rates:  Cap rates have been expanding, but sellers think they will tighten. 

That would make this much more complicated, since you'd likely need lender approval.In any event, you'll want to check your mortgage (if you have one) and the lease to see if you can transfer or assign.

My endgame is to end up with $300k/yr in post-mortgage income in 20 years based on investments I make now followed by continued investments over the next 10-15 years own.

., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

Rates fall off a cliff if you go 25% down. 

You get a Capitalization Rate (CAP Rate), which equals your annualized return by dividing the Net Operating Income (you had gross in your narrative) by the purchase price.

Investing in a mortgage fund should not have tax implications for your Roth IRA since the investment is passive. 

If you are selling for 1M after closing costs you could purchase two 500k properties in your exchange and own one cash and a mortgage on the second.