You may be able to deduct mortgage interest and property taxes before the property is in service. 

If you live in the home for 2 out of the past 5 years and move out of state you may be exempt from the tax.  

The absolute best way to avoid taxes is not earn income.  

NJ has the highest taxes per capita in the country so high taxes are expected especially in Northern NJ.

This isn’t/wasn’t a loophole - just tax policy. 

Here are the key numbers:Potential purchase price: Mid-$400k rangeAppraised value: Estimated at ~$500kRehabbed comparable properties (comps): ~$580-600kMonthly PITI (with 5% down, including mortgage insurance): ~$3400First-year PITI (with 2-1 buydown): ~$2900Monthly income (after taxes): ~4-5kLiving expenses (utilities, groceries, etc.): ~$1600Savings available: ~15-20% of the purchase priceCash to close: ~$34kRehab estimate: ~$34kRemaining reserves: ~$20-25kTo fully fund the rehab, I’d need to come up with an additional ~$15k in the short term, which I anticipate paying back quickly once the rental portion is generating income.

This is a screenshot from a private Facebook group for tax professionals.

I agree it’s a stalemate right now but in addition to the affordability, the issue is that it’s easy to make 5% (after tax) in the stock market, and has been for several years.  

I’m in the 33% tax bracket through my real job and this could be a big difference in taxes owed if we sold the property?

However, aside from that, I couldn’t find much information about them, and the only online presence seems to be the wife’s LinkedIn profile (though I’ve never met her in person and am just going off her profile picture on Zillow).After submitting the application through Zillow, we attached our income (two months of pay stubs for each of us from our current jobs), work references, credit and criminal background, rental history, and the contact info for our current landlord (who just so happens to be my fiancé’s father).