The 40K property you use in your example will never produce $600 positive cash flow.

I just got lucky with appreciation.My wife and I are now focused on acquiring our first cash flow positive property.

Sounds like a lot of major repairs have been done over the years which is a huge positive.

If you did not include it in your original analysis it will be hard to cover to cost and maintain positive Cash Flow. 

I would only pay the mortgage off with excess cash flow that was not needed for the running of the asset.. if your making a few hundred a month positive whats that going to do for you mine as well pay it down so you don't just spend the money on dinner closes starbucks etc. 

@Robert Falco, I (and many here on BP) agree with you: buy as many properties as you can qualify for, with as little deposit as allowed, while still aiming for some positive cash flow.ie.

I work in Sales, and my new position has a much lower base than my previous position, so I made sure my LO knew as soon as the switch had been made. 

It's almost impossible to find a condo where after the mortgage and fees you can positively cash flow.

I would recommend talking to someone to figure out if you qualify for the deduction, and to perform some tax planning to best position yourself to take advantage of the deduction.

Also, your sibling still effectively gets a discount since 50% of it goes to paying him/herself.In regards to what should be in the operating agreement, the attorney who drafts it for you would be in the best position to answer that.