If debt-financed real estate is acquired via an IRA, any income attributable to such investment will generally be subject to unrelated debt finance income tax.5.

If debt-financed real estate is acquired via an IRA, any income attributable to such investment will generally be subject to unrelated debt finance income tax.5.

Then all profits and losses are attributed accordingly.

The claw back - If your investment properties are in CA now then you need to know that CA has a provision where even if you use a 1031 to move the property from CA to another state, if you sell it later you will have to pay CA tax on the profit attributed to that property while it was in CA. 

Also, depending on your area, a house with those attributes and size could be in demand a rent high so check your local rental rates to see how your cash flow would be.

Sale price - selling costs- purchase price - improvements - depr = Taxable gainPortion attributed to depreciation is at ordinary tax rate not CG up to 25%

It won't matter that it's secured by your personal residence.It gets much more complicated in reality, because you would have a mixture of business and personal use, but the point is that your interest will be at least partially deductible, and in a much better place than personal itemized deductions on Schedule A.Once again, if the property is never rented for profit - then the interest attributed to it is not deductible unless the loan is secured by that same property.

I attribute this to a couple of things: 1) LA vs KC is a major price difference, LA is actually about 10x more expensive. 2) culture, in KC people are generally honest and trustworthy, much less true in CA. 3) litigious culture, related to 2 but generally more litigious in CA.

No one ever asks for references or any other qualifying attribute.

All have been very successful and I attribute that the buying theproperty right.