I manage the property and get all the rent (it's a 2 unit building with a garage that is rented), and reap all the tax benefits. 

If it's any consolation, the benefits of expensing vs depreciating are only meaningful to those whose loss real estate tax write-offs aren't restricted by the passive loss limitations.

I read everything I could on BiggerPockets on syndications (including such articles as "The Compelling Tax Benefits of Real Estate Syndication") and searched on the wide web and nothing even hints at how a cash distribution (what I often hear referred to as a "dividend") is anything but taxable income like you'd get on a 1099-INT or 1099-DIV.So what is a distribution if it's so independent of the taxable income? 

One on a property in Colorado, another on a property in Washington.Colorado: 130M balance, 3.375%, LTV ~51%Washington: 262M balance, 3.875%, LTV ~60%Maximum Loan Limits in Snohomish & King Counties: $667MMy idea to leverage myself into a new primary residence is in 3 parts.Refinance the WA property to conventional financing to free up VA eligibility and back it up with a 95% equity line of credit from SDFCU.Draw a NOO equity line on the CO propertyUse both equity lines for a downpayment on a new primary residence financed with VA fundingMy question is, does it make sense to refinance the WA property for the benefit of VA eligibility on the new purchase? 

I can't see the reason to go else where to make 1% or 2% greater return.. you would eat that up in travel costs alone.But anyway.. in my mind we are getting to a balance market.. and your correct rents are not keeping up with costs.. so will be interesting to see how it all shakes out in the years to come.I remember when I started in the business if you put 20% down or 25% down and the tenant just paid off your house  forget about cash flow that was a huge win..and why not.. its a forced savings safe investment tax benefits.. etc.. then it became you have to make money on your down payment this is what created that run..Maybe we will step back in time and break even will be great..

At this point in time, you have all the rights and obligations (and tax benefits) of home ownership) and can claim the typical home-ownership Schedule A deductions on your personal 1040 if you itemize.  

I think multifamily is one of the best vehicles for passive income, tax benefits and growing wealth, but my why was to create a lifestyle that supported my business.A strong why will counteract any bumps in the road, in my case, some pretty big pot holes.  

Beyond financing this deal, better credit will save you on insurance costs among other benefits. 

If so should it be done as 2 LLCs for the best tax benefits for the two of us? 

So you don't really need a realtor to write the offers for you although im not sure the benefits of doing that since you don't pay any commission as a buyer.There are multiple ways to get access to the mls.