As copied and pasted from above-(1) more than one-half of the personal services the taxpayer performs in trades or businesses during the tax year are in real property trades or businesses in which the taxpayer materially participatesThat's how I understand the W-2 problem... it is hard to say you spend more time on real estate than any other activity if you work 2,080 hours.Another consideration is how much you rely on the W-2 income for lifestyle versus rental income.

Hi Dustin, I will say that section 8 and rental assistance programs are quite slow when it comes to getting back - if they do qualify, they should be able to get rental assistance but it likely will take a bit of time before you get paid as a landlord.

I spoke to my banker today and he indicated that they won't do a HELOC out of a home that is a rental - only from my personal residence. 

Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.2.

I recently bought a property am living in it and after a year plan on classifying it as a rental.

So, I am back where I started and have a W2 again (in my own biz) and we have a small team managing the rentals, I only get involved with buying and with bigger construction issues. 

They apparently provide mentorship for all aspects of your business and Real Estate and Rentals is one of the areas mentioned as a potential business.

Is anyone know who is doing rental properties financing in grand forks North Dakota?

If your rents are strong and the Loan Officer calculated your rental income well, you should not have an issue qualifying for a HELOC on a primary. 

Many speculative investors with over confident numbers purchased short terms rentals in Hot Spots near national parks based on the returns of a short term rental.