This question is regarding a separate house, and a separate home equity loan.

First year and beyond is typical on a schedule E, same as a LTR unless your providing substantial services.

My normal insurance provider(Erie) said they will not provide coverage on a rental we are about to purchase due to the home having fireplaces.

More on DSCR loans loans if you decide to go that route: DSCR loans won't use your income to underwrite the loan which is what conventional loans will use to underwrite the loan.

You don't have to have that to get a loan or buy a home, but it will help. 

I'm confused on how the financing and construction loan would work.

Our financial commitment ensured a smooth and expedited transaction, reflecting our dedication to providing necessary resources for successful real estate ventures and maximizing profitability through strategic investments.

I just listened to the latest episode of the BiggerPockets OG podcast where the guest was referencing conventional investment loans with a 15% LTV.

Once you rehab it and maybe put $50k of "sweat equity into it", it would be worth $200k, but they would sell it to you for $150k seller financing after the down payment.So, on the surface it sounds great because you aren't coming out of pocket, but in reality if you have the means to close the deal in cash or with any kind of financing like a hard money loan you would likely be better off. 

If at the end of the year I have ended up not making as much as my expenses is it technically considered a loss or since I own the house, has the house provided me more income?