Thanks in advance, I hope to get some knowledge out of this as well as help any others in a similar situation.

Check out socketsite.comLuxury condos aren't doing hot in SF and there's some examples on that site that are interesting.I think the key here is that it's specific condos some of which were likely overpaid and now we're seeing true value but it's more of unique situation then city wide trend. 

I would like some help on what you would do if you were in my situation. 

The IRS doesn’t care how you financed the property, just that you’re properly reporting your income and deductions.There are IRS guidelines for your situation - try searching around google or talk to a CPA

You should have done this before you started your business and had you done that you would not find yourself in this situation of not knowing what to do.

What else am I missing in this situation to protect myself?

I think you’re in a good situation.

But i guess i have to look into other options and see what best for my situation .

My bladder alarm goes off at 4am every morning.

In essence, in an effort to save on taxes, I'm limiting the amount at which I can use my own funds to acquire properties.Has anyone dealt with this conundrum and what are your thoughts on this situation?