@Tom HermanUsually not a good idea.You'll lose the capital gains exemption.You'll only have access to hard money or commercial lenders.You would need to speak with an accountant and get a serious opinion on it to see if it makes sense...

I have gained a significant amount of knowledge and resources within a short amount of time.

If it was a primary residence for at least 2 of the last 5 years then 250-500k of gain should be excluded. 

Have to admit, I love the passive income.

As I'm near the date when I'd lose the capital gains tax exemption, I need to either sell now or hold for the long-term. 

Since I live in an expensive area, and since I don't plan to leave my full-time job right now, I've been focused on turn-key and other passive strategies.

Lots of real estate investors have already replaced their w-2 income with passive income.

For example, the property is owned by the self-directed IRA and all the expenses and gains flow through the self-directed IRA.

@Hobie Day, crazy how an old thread can gain new life when people come across it.

I'm an out-of-state "newbie" investor looking at a specific apartment investment opportunity (passive LP) in Houston.