The first is that there's no consensus between tax professionals, and the second is that you will not like my personal interpretation.My interpretation is:Until the property is "placed in service" - everything goes into basis.Illustration.You buy a property July 1st.You finish rehab November 1st and put the property on the market.Your tenant moves in January 15th.The property was placed in service November 1st, and it does not matter that the tenant did not move in until the next year.Everything paid between July 1st and November 1st, including interest and utilities, goes into basis.

There will be no assessment for increase in taxes or insurance so remains at $1935.

You could look into forming a C Corp as an alternative way to own this property that could affect your tax returns differently, I am not a CPA or giving tax advise.

Taxes, costs, eviction complexity, etc are going to be a much bigger factor in your success than anything else.

We are both 28 years old with zero experience prior to getting involved, she works for the business now and I work Blue Collar in the trades. 

I understand I wouldn't get the benefit of tax deductions, but what else am I missing that makes this a good deal? 

Bear in mind that the fiscal treatment of the two options in Mexico is different (withholding tax on the gross income with the fideicomiso vs cost deductions with the corporation).

Another wildcard is that the tax office opened in The UAE a year ago.

Quote from @Michael Overall: Good day, If an investor has 10 rentals and wanted to over time sell them and put the money tax free from a 1031 toward a large purchase is there a process to do that? 

Also, I'm not sure how you're paying attention to it on the tax side, but the unit that you are living in's profit at sale is calculated differently than the other unit that you're renting out.Once you move out, that unit is officially available for rent so from that point forward, any profit gained at future sale will be calculated starting from that point and will be taxable.