Consider the possibility of an investment of the $100k into an apartment community where the syndicators execute a cost-segregation study with 100% depreciation in the first year offsetting and deferring taxable incomes.

Do I just ignore these 1099 as its not taxable income?

There are also REITS (best held in a retirement account bc of the taxable distributions) - I use my Vanguard brokerage to hold REITS.  

I would keep your money in your Roth so you have some diversification and aren't 100% invested in RE.While RE is my bread and butter as well I max out a Roth yearly and a work 401k as well to create additional truly passive income.The other thing not mentioned is while a Roth is a home run as far as taxes go, a traditional can still be beneficial to the RE investor who has W-2 income of under 150k as with a traditional IRA you can deduct the 5500 against your  taxable income allowing to maximize the 25k passive loss allowance.

If yes, you may not need to pay the full 15.3% self-employment tax which would be huge.Real Estate agent fees are factored into the taxable gain so technically you don't add the full 6% as a deduction.Flips are not subject to capital gains rate.

He probably wouldn’t show a taxable profit after interest, property taxes, insurance and depreciation, especially if it’s truly an affluent neighborhood. $20k or more in depreciation wipes out most rental income. 

@Jarvis Smith In the state of Washington all residential remodeling services are taxable.  

Forgiven debt is taxable income, as far as the IRS is concerned.

Also I’m pretty sure that’s calculated on net profit, so broker fees, etc. reduce the taxable gain).If you owe capital gains tax, I’ve heard it’s somewhere in the 30%-38% range in the higher-ish brackets for CA residents but again.

If you want to do a rough ballpark to see if you might meet this, pull up your most recent tax returns (or 2017 before you file them), look at net taxable number at the bottom of Schedule E, add back depreciation and mortgage interest, divide by 12, and subtract your P&I payment (we removed just the interest earlier, now we're including the P&I) to arrive at ballpark monthly true net cashflow, and compare to personal monthly debt obligations.In your case, the strategy might be to find a local lender that'll entertain this, take out as much as you can using Fannie money, and only use hard money once you're tapped out of Fannie money.