If your licensed as a realor doesn't all the income you make have to be reported as earned income rather than passive? 

That said, it is COMPLETELY different from the beachfront condo area in both guest characteristics and overall potential. 3) My personal opinion (based on years of on the ground experience in the area as a living breathing owner and manager) - 2b/2b have the lowest per sq ft income potential. 3b+ units do better as do STUDIOS!!! 

lol. asset cap rate should be higher than mortgage rate to begin with.this is the same as buy-hold , if i can invest to debt that generates 8% income why buying equity investment that appreciate less than 5%.

Peter,That does not sound accurate based on having a Schedule E and being able to take those deductions as well as other standards.As an investor it’s not a bad thing to show more gross income which usually allows you to buy more properties with more income and a lower DTI.

The holder of the note makes no real difference; in Jane's case, it might be more advantageous to her to hold the note than sell outright depending on how she can absorb the sale from a tax perspective; in your case you don't have enough income to do a conventional loan so getting a seller carry can give you more properties.

So, I know once I can focus on it full-time, I’ll be able to double my income from the business. 

Most lenders but not all, should use the existing 2nd unit lease at 75% of gross for extra income to qualify on either loan types.

Those that respond “$0” or something ridiculous, you can request income documentation from them to justify.Don’t be afraid to share with them how much your property taxes & Insurance increased and that YOU cannot afford to absorb them.ALWAYS get an increase or something of value annually or tenants will start thinking they should never have an increase, making future increases that much more difficult to negotiate.

If you don't have patience or expertise or time I would just sell and 1031 exchange into a property that generates income, appreciates and helps build wealth.

If you're looking for basic income/expense tracking, I'd suggest checking out Stessa.