Do I still need a normal w-2 job  or can I live and grow exponentially from $200k? 

@Andrew Smith If you want to take the safer approach then pay off what you have and continue to grow slowly and grow a small portfolio.

If you know expenses will grow that fast you need to increase income the same.What type property is this? 

I was looking for a MSA with a growing population, low unemployment, and I had thought that a low price/rent ratio was the most important. 

Now I've shifted careers to help grow our contracting business and flip houses as a family.

The area is still growing like crazy, and the price is half of San Diego. 

.#8 There's an enormous amount of information out there but remember this key piece of advice.

@Alicia JohnsonThe answer is maybe, as you probably expected.As far as how hard it would be to prove - remember that the IRS requires a detailed time log, created as you go (as opposed to reconstruction during the audit).

We have 3 properties at the moment, but I’m wanting to grow.

So, never grow your business?