I have a feeling that the tax preparer took another shortcut and just used last years return to do this one so it was missed again. 

Feel free to shoot me a DM any time.  

If you are wanting to learn more about how to protect yourself as the PML, check out the book Lend to Live: Earn Hassle-Free Passive Income in Real Estate with Private Money Lending available in the BiggerPockets bookstore!

Instead of getting the property free and clear, you keep the existing loan in place. 

But I feel the competition is not as much.

It is good for your owners if a repeat guest chooses another of your listings when the place they stayed before is unavailable and free marketing for you on every listing. 

I want to do things the right way, but feel the pressure of a tight budget that will get drained considerably by the permit fee and multiple inspection fees. 

Also, please feel free to share any information you have about those off-market properties

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To be fair, these are all houses with yards, I might feel different about a 10th floor walk up condo and a Great Dane.