SoCal CAP rates do seem to be 5% from the redfin descriptions I read on some of them.I'd much rather buy a 1 million dollar SFH in north county than a 1 million dollar 4 unit in a low income neighborhood. 

Depending on the situation you may find a quad as well that would effectively let you use 75% of the rental income from the 3 units you don't occupy.

You should both read Lend to Live: Earn Hassle-free Passive Income in Real Estate with Private Money Lending.

The 22 yo graduates from college in computer science and says he is working on passive income this summer-wants to code something that earns passive income.

You'll just have to pay whatever their annual or quarterly fee will be.

I've recently had the roof replaced and fully updated the common areas.Here's a breakdown of the situation: The units are currently marketed as furnished rentals (cashflow well), and based on the current income of the 4 units I own, I anticipate that all 6 units combined will gross $182,400 annually.

Can I claim the losses as active against W2 income?

However, I will still be required to pay income tax on the income generated from my private lending activities.

Now though, it’s a real issue because it’s affecting my rental income.

This is way more challenging than what the gurus are saying, buy in the Midwest and flip or BRRRR and I'm relying on my team since I can't be there in person, maybe 2 to 3 times a year.I agree that a $10,000 profit (before paying ordinary income tax to the IRS) is way too small.