Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

This designation allows them to treat rental real estate losses as non-passive, meaning they can deduct losses against other active income.

At 100k the deduction starts to phase out and is fully phased out at 150k.

They ended up renegotiating halfway through so they could take over management earlier and maximize their deductions.

I am in a similar situation to you in that I am in a 100% commission sales job and the number of deductions and the whittling away of your effective tax rate is very powerful once you can wrap your head around the numbers and the big picture.

While they tend to offer lower returns than stocks or real estate, they provide stability and consistent income.Another potential avenue is health savings accounts (HSAs), which offer a triple tax benefit—contributions are tax-deductible, earnings grow tax-free, and withdrawals are tax-free if used for qualified medical expenses.

Plus, if done correctly, you might be able to deduct your travel as a business expense.

@Don Konipol, correct me if I'm wrong, but IRA's and 401K money are not 100% protected from, or fully for 1. divorce, 2. individual contributions made directly into the funds (vs. as deducted from your salary during your employment), 3. bankruptcy (like, if you move funds into IRA right before declaring bankruptcy) 4.

Instead, you might want to think about investing those proceeds into another passive activity that generates future deductible losses.A good friend of mine in Phoenix faced almost the exact same issue last year.

Not sure how much your taxes increased, but one way to cheaply and quickly drop your monthly payment is to increase your deductible on your insurance for the time being (please speak to your insurance agent about what this means for you).