I then would have my tax cpa enter in or do it after discussing tax based items (depreciation- MACRS, reserves, year end accruals, reserves, etc.).

@Emily Gowen so as you pointed out you would not have to do a 1031 exchange on your current home to avoid the capital gains tax and coupled with what Dave Foster pointed out I think, speaking from experience you would have a high likelihood of success. 

@Rafael Ramos All your goals contradict each other:(1) Cashflow: buy Class C & D properties2) Appreciation: buy Class A & B properties3) Low Crime: buy Class A & B properties4) Why would you want your investments to lose money to lower your taxes?

example:Purchase Price: $70kRehab: $30kARV: $200kRent: $1,500I can pull out up to $150k but with taxes and insurance I’d be in the red.

If you’re interested in investing in real estate, you can consider doing so with a Self-Directed IRA to defer taxes on capital gains until you actually withdraw the funds from your IRA.

It's essential to do your due diligence and perhaps consider investing in more established or upcoming neighborhoods.Property Taxes: New Mexico's property taxes are relatively low in comparison to other states.

The revenue and expense categories line up with your Schedule E which makes it a breeze to prepare for filing your taxes and I like the reporting features, too.

@Brice Alef-Torrisi putting each property in its own LLC is usually overkill.Getting a bank account for each LLC is typically something you need to do to avoid "piercing of the LLC corporate veil" (actually depends on tax selection you made for LLC), but is also overkill.You haven't indicated how you are holding the deed for the latest property.If in your name or same LLC, you don't need a separate bank account.If in separate LLC, you can create a Master LLC, have each property LLC hire the Master LLC to manage their affairs, and just get a bank account for Master LLC.This is an opinion, not advice, so lookup CPA Frank Alcini in Troy for expert advice.

Thats $7700 a year NOT including my accountant/Tax prep. 

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.