If I got a home equity loan for Property 1 and used the proceeds as downpayment for Property 2 and then got a 2nd loan for the remaining 75% purchase price for Property 2, when I sell Property 2, can I use the Property 1 loan as part of the cost basis for computing Property 2 capital gains?

. ✌️ (and don’t forget to calculate short term capital gains tax - that’s why I prefer passive income over flipping)

4) would this also work to defer gains on fix and flips?

Over time, rents may increase, improving your cash flow, and you’ll gain equity and valuable experience managing tenants and property operations.

Just a few tips to look into but it usually takes some time to gain steam on your first listing so be patient and keep analyzing the local compeition /your own listing. 

And if you convert it to a rental you’ll be facing a $200k taxable gain. 

I am planning to get into the TN real estate market as my first investment and am looking for some information.In particular: Areas to steer clear of, property management fees, typical cosmetic rehab costs, etc.My strategy is to put large down payments on 2 properties (relative to housing prices) to help pay for my living in NY while still gaining appreciation in a growing real estate market.

The mortgage is currently under my name, so I’m unsure what benefits, if any, I’d gain from using an LLC in this situation.

You have to see huge appreciation to see any gain. 

Consider the "2 of the last 5 year rule" to avoid capital gains.