@Nicole TuffarelliI am aware of a few groups that can usually utilize funds from an IRA to help purchase new homes at reduced leverage (usually capped at 70% LTV).It might be more beneficial from a tax-standpoint as well to do it that way instead of drawing it all out.

Starting next month when my renter moves in i will have only utilities and taxes as overhead at my new home in michigan. 

So the property isn't yet ready for permanent debt.

How bad are the capital gains taxes?

You will like tax time too. 

Also property taxes were incredibly cheap at $500 / year (expected to go up in about 3 yrs). 

I understand the tax foreclosure and bank foreclosure before the REO but the HOA had me confused.

This would fit very well into my long term strategy of growing my LTR portfolio while still providing big tax benefits against my W2 income. 

If you aren't a Real Estate Professional, I am not sure adding more to your portfolio, with the main intention being tax reduction, is the best option.

This is all before title, tax, conveyance fee's, water hold, etc.