I know that most people who OWN a property and put it on airbnb claim the income on Schedule E ("passive income"), which avoids having to pay the 15.3% self-employment tax.I'm wondering if those who are practicing rental arbitrage by renting the place that they list on airbnb also claim the income on Schedule E, or if you claim it on Schedule C bc you don't own the place that you're listing on airbnb.Whether you own or rent the property that you list on Airbnb, the activities are the same: acquiring the property, furnishing it, activating utilities, listing it on Airbnb, hiring cleaning services, etc, etc.

Buy a buy & hold with no value add with a HELOC would be a risky move unless you have the income to pay down the HELOC. 

You have an S-corp that is generating income.

This is an important status for people to go for since it allows you to write off losses from rental activities on your other active income. 

We asked them for a cosigner, so they sent us cosigner credit info, but no income info.

If one had enough income to cover all their debt payments outside of rental income then reserves would not be as necessary as someone who relies on rental income to live on.

To answer your second point in one, passive losses from your 1st property will offset income from your 2nd property if it begins generating income.

Understand factors like demand, supply, demographics, and economic trends.Diversification: Spread your investments across different types of properties, locations, and markets to reduce exposure to risk.Financial Analysis: Conduct comprehensive financial analysis, including assessing potential rental income, expenses, and cash flow projections.

The extra income from renting your current house would certainly help out regardless of what you decide to do and if you do your homework on a second house, it'll pay for itself!

In order to past this SS test, your appraised market gross rental income at 75% has to be more/equal to your monthly mortgage payment (PITIA).