If you have high earned income and can funnel some of the extra money into your passive real estate business to make repairs etc that supplements the passive cash flow, can you still write these expense of as business deductions, even though the money came from your earned income?

I would have expected my tax basis in assets to go down by $900k so that when I sell, I would have more capital gains tax to pay. 

I have a full-time job that pays well, so I am focusing on properties that will produce passive income.

Freeing it up would open up options.Unfortunately 1 year of living in the home presents some tax issues on any gains but the gains seem to be modest so that is not that much of an issue.So what would I do?

One, for his "mentorship" fees, and two, for passive (largely-unearned) reselling property for profit!] 

There are many advantages to having rentals including depreciation, avoided capital gains from the sale, passive income, etc. 

Your gain/basis from property 1 gets carried over into property 2. 

If you're looking to manage your own homes and perhaps start a property management company, it's a great idea to get a job at one in your area, as you'll gain a lot of useful knowledge and can ensure that you handle future situations legally, correctly, and efficiently.

Great write up but you should have tried making it to the 2 year mark to exclude some gain!!  

He paid 930k all said and done and its hard to believe the property gained 600k which would come out to about 1.5ish mil in 9yrs granted it is in a pristine location.