Unfortunately, when I do the math the Lake Tahoe property will be a money sink (~15-18 K in expenses maybe about 3 to 4 K revenue - With about 1 month personal use per year).So, my question is if I claim the Tahoe property as an investment property 11/12 months, and run it at a loss, but my Texas property more than makes up for any losses (i.e. my real estate portfolio is cash flow positive), will the IRS look at my properties individually and deem the Tahoe property as a "Not-for_Profit Activity" and disallow any deductions from that property?

These cash flows can consist of Loan interestRepayment of loan principalcash flow from operationsnet residue on saleThe math isn't as simple as measuring just simple interest.

Please explain any math that you may use.

You can run the math and see for yourself, all cash will always mean a lower ROI.

You can go through the math you used to arrive at that number, but you don't have to.

My math might be off, assumptions also.

I did my math and the real number is closer to 8%.  

Of course less any other improvement costs you have put into it since the LLC took ownership.I did the opposite of you, where I sold an LLC asset to myself, and the math worked out for me as mentioned above.  

 For a first time investor, i don't believe i would recommend investing in a lower end rental. if you mean by lower end, a D class property. a lot of times the tenants that can attract can be problematic, and if you are not use to handling that it could bring you down and turn you off from investing further. search out a property in a decent maybe up and coming area, one in an area where it looks like people take care of their homes. do all your math and homework to find out all your expenses and what the average rent is for the area for the same size rental. i would recommend joining your local associations, you could meet some contacts there and learn from them about areas.

You would have to do the math on the rental fee, but a decent high efficiency furnace for the average 1200 sq/ft home should only run about 3000-4000 dollars and they last approx 12-15 years.