The 1031 exchange is what allows them to do this without having to pay tax on the gain or depreciation recapture. 

If 1031 is to be implemented it must be done on the property level.2. 1031 generally does not apply to IRAs since they are tax-exempt. 3.

I 100% endorse adding in the escrows for taxes and insurance to set the buyer/borrower up for success. 

Add another $300 or so for taxes and insurance and you're at $2465 PITI. 

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

If your bottom line numbers on tax returns and W2 income are not strong however, this will be an abrupt dead end.

Instead of jumping into an expensive Long Island market with negative cash flow, consider investing in a Texas market like San Antonio, Houston, or DFW suburbs—these areas offer strong rental demand, lower property taxes than NY, and better cash flow potential.

This is tax free. 

You need to have the income and tax liability to support the depreciation.

I bought it last year and thus far have: 1) Appealed assessed value to bring down taxes, 2) Got better (less expensive) insurance, 2) Rehabbed 3/4 units, and 3) increased rents $300-$400 per unit along the way.