I know I'm getting the tax benefits of depreciation, the minimal positive cashflow, and the appreciation on the property, but It's pretty much a long term play of slowly raising rents annually to increase cashflow, which will eventually get basically reset when my loan goes P+I in 10 years.

Now I can see some builders having an issue with comps.. but other than that its crazy to take these funds as income and then pay tax and plow it right back in.. 

I'd also add to that that you are paying a 20% withholding tax on gross rental income. 

Let's assume your expenses (mortgage, taxes, insurance, maintenance, vacancy, etc.) comes to a clean $600 and the property rents for $1,000.

Assuming this is an 8 cap neighborhood you'd have a ~$420-450k value within a year (unless property taxes are crazy high) when leases would renew since it'd be valued as a commercial building with the office space.

although we bought about 6 years ago or so for 270 put 100k into it so you can do the math  no debt .. hoa 400  we pay utls. 200 or so.. so 600 a month out of the 3500.. tax's about 1500 a year ( got to love Vegas taxs ) value today right at 600k.. so lets say we net about 33k a year on 370k cash .. so not bad little under 10% COC with an outstanding tenant one of the best I have ever had.PS given tenant quality we manage ourselves.. 

You will want to fully understand the tax reporting burden you will face. 

It’s great to be trusted with others hard earned capital but I only accept that responsibility because I KNOW I can do the job - that I have done the job over the years. 

So the question becomes based on their individual and personal tax situation what is the estimated tax burden they'd save? 

Though I would caution you on hard money lending until you understand the industry a bit better, that can be very rewarding but you have to be able to do your due diligence on deals because you're turning over your hard-earned money to an individuals project, often a flip.