Not an accountant or cpa but there are many ways to reduce taxable income if you have a business such as paying kids to do some work and make sure you account properly for expenses.

Equity % will be important but since that mortgage remains in 1st position this should be possible to do...as long as the "subject to" deal was structured properly sort of thing. 

If the investor fails to properly manage the asset you can lose money.

Maybe someone with recent experience can chime-in, but without proper licensing you can't do what you're describing in Philly. 

@Julio Velazquez a stabilized property will provide more income, cost more and be less work if the tenants were properly screened and everything is documented.

@Obadiah Roszman and @Janelle Carlson if you can qualify for a Fannie/Freddie type of loan then I wrote an article on how to properly structure your cash purchases HERE. 

The vast majority of our rentals (SFHs in DC proper) are unfurnished, and we advise owners that that's the best way to go.

Is he telling this to the tenant and never served proper notice back then? 

If analyzed and assessed properly, it can validate your ultra-conservative income and expenses. 

Then they start lending, but only on deals and borrowers they have fully vetted and only with proper forms documents and procedure.Sometimes our passive investors stay to learn from the speaker, and I have found that our more successful passive lenders do stay.