Everyone saw a small decline in the property taxes and stayed quiet.

Talk to a tax professional.

Net income = $39,240Monthly operating expenses are as follows: Trash - $33, Landscaping/yard - $66, Electric - tenants pay, Water - $95, Maintenance $87Monthly taxes about 3KSo, gross expenses are at $41,064If I'm doing the calculations correctly, my net operating income is -$21,888 and cap rate is -3.4%.Obviously the current numbers look terrible for this investment, but I feel like the rent should be raised significantly based on comps (above 2K each unit). 

It runs background checks, credit reports, eviction/criminal reports, template leases, a Docusign-like program to sign lease agreements, rent collection, tax consolidation for EOY tax time, etc. 

My goal is to build $10k of passive income from rentals and become debt free - meaning paying off all of my mortgages (home and investments).

Consult with experts, such as real estate agents, financial advisors, lawyers, and tax professionals, to help you navigate the investment process and meet all legal and financial obligations.Good luck!

One thing you didn't talk about was equity, taxes, or ROE.

The initial returns are lower on paper in better locations (lower cap rate, less initial cashflow according to the magic spreadsheet), but the overall returns in reality are much better including all the different ways people make money in real estate (gained equity through natural and forced appreciation, principle pay-down, increasing rents= higher cash flow when looking at the big picture if you buy and hold, depreciation tax benefits, plus way less of the big profit killers like turnover, non-paying tenants, property damage and theft, dealing with bad contractors because good ones don’t choose to work in bad areas either, etc.). 

Debt increases risk AND reward. 

Ina, there are several lenders servicing the NYC multi family space that pretty loose about income and tax returns as long as the property shows decent rental income.