I assume, and this is where I need clarification, that the principal in the monthly payment is tax free (repayment of capital) and the interest is treated as ordinary income just like most investments. 

@Jamarco Thomas, The good thing about the ESOP is the distribution is qualified for NUA Treatment ( capital gain treatment) compared to distribution from other Qualified plan such as 401k that is taxed at ordinary rate. 

Most importantly, you can offset other ordinary/portfolio income with the RE tax loss as you will qualify for RE professional easily after you retire. 

They risk a suit for deficiency ( like banks in Texas go hard at this they always have).. and the 1099c  debt forgiveness comes back to haunt the investor in the form of ordinary income.

How does capital gains lower you ordinary tax bracket, also in seller finance is the interest tax a ordinary tax or still capital gains tax?

Photos of the interior show some flakey paint and dated interior, but nothing seems out of the ordinary - no signs of fire or flood or mold damage.

.* Awful.Withdrawals are taxed at ordinary income rates, as if you earned that amount of money in that year.* Double awful.

My understanding is that I can invest through an agent, and get a safe, trouble-free income stream (with the understanding that this would be taxed as ordinary income).I'm afraid of making a ghastly mistake here.

I took out a 35K Home equity loan to remodel the main apartment (which was completely gutted when I bought it), repaint the outside, some roof work, landscaping work, expand the driveway, new sidewalks and a new concrete patio out back.

Single member LLC, income is expected to be taxed as ordinary income.