@Anthony Warlick at 1.25M at 8%, assuming 75% LTV your payment would be 6879 without taxes and insurance (since that wasn't listed here).

FHA loan with monthly payment including taxes about 7800. the other side would get up to 3200.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

A lot of my investors are just buying A-class for the tax benefit and breaking even. 

Let's just imagine a scenario where you only have one property, and you don't use any PMSs or apps like Turno, for example.Cleaning and maintenance: 4 hours per weekRestocking supplies: 1 hour per weekResponding to inquiries and bookings: 2 hours per weekHandling guest concerns during stays: 1 hour per weekCreating and updating listings: 1 hour per weekManaging pricing: 1 hour per weekFinances and taxes: 2 hours per monthInspections and minor improvements: 4 hours per monthTotal estimated time per week: 12 hours, more or lessTotal estimated time per month: 26 hours, more or lessIf you do use pieces of software to automate your work, it can be even less.

How would that affect his tax situation if at all?

He narrowly escaped the property tax sale on his primary home a few weeks ago.  

@Zachary JensenIs it only depriciation or also insurance/re tax/mortgage costs?

New Home: I would need to dump some of my brokerage accounts for the downpayment(so some capital gains taxes would need to be paid to finance the downpayment on the new house) or if I sold our "current residence(2nd home)" I wouldn't need to.I understand the tax incentive of selling within 5 years of living there for 2 years, however, the cash flow seems larger then what I would get taking the money and investing in new RE in the future. 

They designed a very nice postcard for me and i sampled a batch of about 1500 postcards to a list I provided to them.My results....7 responses (0.46%).The list was Out-of-State owners I pulled from the tax records, of which I got about a 13% response rate using yellow letters.I'm not going to say anything bad about them, I just don't think postcards work well for finding motivated sellers in my area.