Go to Zillow and search for rentals, see whats currently listed, look at how long they have been listed, has the price been reduced over that time, etc.

Not the best deal at those numbers.Can you negotiate the price down a bit, or maybe reduce the repair costs somehow?

It also helps eliminate/reduce the risk involved in 1031 Exchange transactions because you have already closed on your Replacement Property.

In other words, it is a good long term investment vehicle not one for reducing your taxes now unless annual contributions are made. 

Track all of your project income and expenses and keep them in report form and review them regularly with a couple of people you trust and try to reduce expenses and /or increase income that will help you grow.Do not try to do everything yourself.  

If I have a fairly new portfolio in higher-end areas paid off, I'd probably reduce the proportional amount of reserves I keep.

If say the goal is to reinvest those proceeds into Buy & Hold, how would one structure where to hold the money to reduce taxes?

So, typical options are:1) Come to closing with the cash difference2) Do a different appraisal3) Walk away4) Seller reduces price to appraisal amount (sometimes the seller will but not always)

You should be able to take usual and customary deductions to reduce your tax exposure and still use much of the income you receive  for a loan.

However, keeping in mind the sellers "income potential" rationale, and the fact that the price hasn't been reduced since listing, my buyers agent has suggested to not go below a $120k offer.