I don't account for principal pay-down in my calculations (since I assume that I'd invest in a different property and have similar pay-down), but your $28k can earn $400 a month, which is something like a 17% return.

That said in a 2 family scenario its a great opportunity to earn rental income day.   

I had always thought that even multi-member LLCs are pass through entities and no taxes are levied at the LLC level even though you do have to file form 1065 to report earnings.

Renters always cried on the utilities cost in the long winter months; They cranked the heat so high & open the window for FRESH air, while it is -30C outside.Unfortunately most bills for this kind of tenants are picked up by Housing.Any normal person that has to earn a living by working hard will never have the mindset like that.

Arizona allows this, but requires that you treat that prepayment as a liability until the income is earned.

Super generic response, but there is not a single asset class that is better, it is about where you are in the cycle and has growth and what is peaking. 

Great job on keeping the receipts you have a business that is active, so you will be making earned income on your profits. 

Seattle seems very pricey but homes are way more affordable than NYC but I've been hearing Seattle is at its peak right now so not sure if I should wait or invest at all.If anyone can give any advice on Seattle or similar populated developing cities that are not as expensive as NYC, that would be great.

What is appropriate is a properly constructed package built on a solid commercial policy form with the ability to offer appropriate coverage for assets under any stage of occupancy or renovation, a simple monthly reporting format with no minimum earned premiums, the ability to waive co-insurance requirements, with no location limits, with the ability to insure multiple controlling entities, offer coverage in all 50 states, special form coverage with theft and vandalism and the ability to actually reduce premiums incrementally by aggregating locations, just to name a few little things.Hope this helps.

If you were to take money from your 401k in any other way, it would most likely be deemed a distribution and subject to your normal earned income rate, and possibly a 10% penalty.I hope that clears things up for you, but let me know if you have any other questions!