How would that affect his tax situation if at all?

He narrowly escaped the property tax sale on his primary home a few weeks ago.  

@Zachary JensenIs it only depriciation or also insurance/re tax/mortgage costs?

New Home: I would need to dump some of my brokerage accounts for the downpayment(so some capital gains taxes would need to be paid to finance the downpayment on the new house) or if I sold our "current residence(2nd home)" I wouldn't need to.I understand the tax incentive of selling within 5 years of living there for 2 years, however, the cash flow seems larger then what I would get taking the money and investing in new RE in the future. 

Id love to schedule a time to talk about it with you

They designed a very nice postcard for me and i sampled a batch of about 1500 postcards to a list I provided to them.My results....7 responses (0.46%).The list was Out-of-State owners I pulled from the tax records, of which I got about a 13% response rate using yellow letters.I'm not going to say anything bad about them, I just don't think postcards work well for finding motivated sellers in my area.

Otherwise you will have to pay higher rental mortgage rate.4) If all goes well, you buy your new home to live in with FHA 3% down or FNMA 5%+ down and rent out unit you were living in. 5) Yes, you may have negative cashflow on the rental for the next 1-3 years, until rents increase, but this is part of investing.Be sure to calculate any changes in the rental property taxes and home insurance resulting from you moving out.

Does that include taxes and insurance? 

The taxes on this property according to the listing is $15,000.

I work with a handful of investor friendly lenders that don't require W2s or tax returns (lending is based on the property not the borrower) but am always exploring new avenues.