-Do your parents want to be equity holders in this new venture, or loan you the money? 

It’s a matter of time is why I’m asking I don’t want to lose out on the house because I can’t show rental income yet for the first house.

JD Martin - agreed, you'd have to for any post-rental repairs.And yes, I can see how that would be a really great strategy if you were marketing to investors especially.Do you see any potential tax pitfalls where the IRS could still find you doing business as a ‘dealer’ versus ‘investor’ and you lose the tax preferential status?

So, if you are going to invest there, I think it best to NOT assume it will continue to boom as it has over the short term, make sure the deal makes sense today, and has some extra "insulation" to cushion you in case it goes bust so that you are not forced to sell or lose the property then.

The Class A neighborhoods are losing value because of the new construction epidemic.

By paying off your mortgage you are losing 7 - 11 percent return on your money.

Ready for new venture to become a real estate investor.

When you pay it off early (or minimize your leverage) you lose this benefit and your returns go down. 

I am numbers oriented businessman who is always investigating different business ideas and ventures.

I've considered wholesaling and lease options but I'm fearful that I will end up losing money and slowing down my savings.