This will reduce your taxable W2 income (401(k) contributions offset your taxable income) and you are paying yourself the interest on the loan while preserving the ability to build up your retirement funds.

My wife, children and I are moving out towards Middletown NY for Medical School.

Medical payments to others is just $1,000. 

Some folks may say writing off little stuff is a waste of time, I see it as for everything I can deduct it reduces the profit side where you have to pay taxes on it.

On my new Schedule E I set up a new depreciation schedule reducing the Basis calculated above by the proportion of depreciation given by the DST.Help please.  

However, If you'd run a bunch of AUS scenarios for folks with that many financed properties, you'd know that Fannie in 99.99999999999999999999% of cases reduces LTV by 5%, which in your scenario would put it at 70%.

If they purchase, the option fee amount paid will be reduced from the purchase price to lower the purchase price on the sales agreement, after they exercise their option to purchase.* The property is not sold and title is not transferred until the tenant exercises the option to buy.

Busy roads and schools, etc don't reduce your rent like it would reduce your sales price.  

I am currently under contract to buying a medical office building.

Getting an environmental study completed and obtaining all of the approvals needed from the local municipality before actually purchasing the property is also a way to reduce a potential disaster.