This is also key when losses are being carried forward, they also need to be in these buckets.For your second question. 

Hope this helps, keep me posted with your journey.

@Jose Mejia this is pretty simple to do. 

This is our first look at DSCR as we've gone conventional up to this point.

Purchase price: $550,000 Cash invested: $145,000 Sale price: $915,000 This was a home run for a long term (5 years) buy & hold investment property (I specialize in this area). - Initial investment of $145K (DP+closing)- It had one tenant for 5 years and 3 months (no turnover), and the tenant paid off the mortgage and expenses in those 5 years.- I spent around $30K to do upgrades before selling.- Sold it for $915K after 5.5 years (received $442K at the closing)- Did 1031 exchange and bought 8 SFH in NE & AL worth of 1.6M (brings $4k/months income now) What made you interested in investing in this type of deal?

I still have this little Schitts Creek.

What made you interested in investing in this type of deal?

This is common in California  Thanks for the reply.

Is pursuing a duplex a lost cause in this area?

I appreciate any assistance with this matter.