Also, lets clarify the fact that I'm acting as an agent on these transactions, as is the OP.  

The OP has stated that the tenant is paying. 

Uncollected rent is not a deductible expense.As for the OP's concerns I would offer this: Anyone who has a $4,000/month military pension has behaved responsibly for a really long time.

Probably should've included this info in the OP.

The OP question was, do you need to be a licensed collection agency on a foreclosure.

The income of an investment company is not eligible for the small business tax reduction (as I indicated to the OP above) in the first place.  

Michael Lucero you are right; however, I think the issues are twofold for the OP.

Here is my current situation:- Currently own my co-op out right (blessed with a family gift) appraised at $400,000 and was able to take out a HELOC for $235,000- I am using $150,000 to purchase a town house in West Palm Beach, FL (all cash deal closing at the beginning of August 2017) leaving about $80,000 remaining available from the HELOC- A little about the purchase - $350 Tax + HOA plus repayment of HELOC currently rented for $1300 minus 8% management feeThe question I am throwing out to everyone: what is the best way to fund my second purchase?  

The spread is based on whether you go top or front load, coin-op or card based.On a 59 unit I would think you would be somewhere around $500-600/month in collections, if you annualize that it comes to $6000-7200 per year and if you apply an 8 CAP to that you have around 75-90k in value created.  

I would love to chat about ops in the SW Ontario market and vacation locales (right now we like Belize, Florida and Roatan/Utila.