Is there a rental cap?

Finally, two other things that you can look into or talk with your CPA to see if there could be any advantages to you (you may be phased out due to income for some) is the Section 199A pass-through deduction, which would require you to start tracking hours spent on your real estate enterprise, as well as the possible CA SALT tax workaround in case you were interested in deducting more than the $10k state and local tax cap for the next few years.If you need referrals for professionals in any of these areas in the San Diego area, feel free to reach out. 

Also, the rental was 1031, so I would have to pay taxes and cap gains right?

Strong Financial Returns: With typical CAP rates around 9%, and an average cost of approximately $530,000 for a three-bedroom, two-bath fourplex, investors can expect an annual income of over $60,000.

•Strong Financial Returns: With typical CAP rates around 9%, and an average cost of approximately $530,000 for a three-bedroom, two-bath fourplex, investors can expect an annual income of over $60,000.

@Dan Rivera  Your analysis does not account for the challenges the lower tier real estate (Cobbs  Creek as an example) has absorbing expenses and cap ex.

I'm not bold enough to buy real estate at negative leverage - few deals in my area (and I presume, Manhattan), are trading at "Cap Rates" greater than 7%. 

Also, eventually, the renovations are out of date or worn and you need to do another cap ex spend. 

I actually did look into this but it wouldn't be ideal for me since cash advances are capped at a percentage of your overall credit card limit which is usually at 30% more or less.

While this would improve the cashflow and cap rate for resale, I'm wondering if it would shrink my market of buyers, since they could no longer use conventional financing as it would no longer conform to a 2-4 unit building.