However, I am unsure as to what the best type of entity would be to set that up (from a personal liability and tax liability stand point).I've been investing in real estate locally in the U.S. for over 10 years, but this is something new for me. 

Leaving me with a payment including taxes and insurance of about 1600 a month for another 30 years.

In addition, what will happen to the tax write off since both properties are paid off? 

With a ton of equity, and by all means, we are wanting to take advantage of the 500k tax exclusion if possible.There is also a probability that we will move back into this home in the future, let's say in a few years or so.

If so, you get the personal exemption of avoiding taxes on up to $250,000.

What about Transfer Tax? 

If so, then it should be a tax free sale.

Sales price: $900,000Seller finance: $400,000 / 2 year ballon / 7% interest rate / interest only monthly payment: $2,333 / no pre-payment feeEstimated monthly income: $9,300 / Annual: $111,600Electric separated - water $450 per monthProperty taxes: $16,700 (with property value assessed)Property Insurance: $6,300Renovation Repairs $150,000I anticipate the Re-fi appraisal to come in at a conservative $1,150,000. 

Leader of Real Estate Investment Firm Admits Role in $658 Million Ponzi Scheme and Multimillion-Dollar Tax Evasion ConspiracyAnyone heard of these guys?

Number of sold are up about 12.5%Today's RatesLooking Ahead:As we head into the Spring market, I predict more buyers will begin entering the market, especially once tax season is over with come April.