Unfortunately, this problem waste a lot of my time that could be spent on other investments.I have used the same tax professional for many years and he is very educated, but also much older than me and it's hard for me to understand all the reasons he has expressed why is better to put the rental on my personal tax returns.

It wasn't until the Garn-St.Germain act in 1982 that they started becoming standard.

Also I understand the funds aren't available for the improvements so that is another obstacle that has me leaning towards price reductions to move on as soon as possible.The exit of lower tier SFH's is something very few investors care to consider when making their investments but deserves far more consideration. 

I wouldn't recommend a standard buy and hold rental because you'll have to pay both your HELOC and mortgage on the house. 

But I also understand some people don’t really care about the cash flow as much as the security of not having to worry about a vacancy or whatever.

Since you missed the 2 out of 5 rule, capital gains taxes might take a chunk of your profits, so consulting a CPA would be smart to understand how much you’d actually keep.

This way, they’ll have a vested interest in maintaining high standards of management.To truly understand property dynamics and support the management team, I recommend spending time on-site.

Quote from @Bob Dole: All,Apologies for the newb question, but I just heard about cost segregation and have been reading up about it online.My understanding is this (and please correct me where I'm wrong):Pros: -accelerate depreciation, front load (vs. just a straight line over 39 years) -save money on taxes because of the depreciationCons: -if I sell the property, the recapture will be larger -not recommended if you flip propertiesSo hypothetical situation:-Majority of our income is W2 based, let's say it's $500k-Net income from commercial rental is $100k-Income from dividends and interests is $100k-Both of us are full time W2, so non-prof real estate (but this can change  -- please see below)So we're hypothetically grossing $700k a year. 

You understand some of the basic concepts, but also have some giant holes in your plan.

@Drew Sygit Trying to understand paying bank this loan rate is good idea or payoff principal early is a good idea.