A little more complicated than I have dealt with, but if the asset qualifies as a capital asset it would depend on length of time held as to Short term or Long term rates.

Get enough of those and you have financial freedom.

Hey Jacob, I would recommend top 10 ways to protect your assets (FREE E-Book) by Royal Legal.

Regarding which state to have your LLC in that is really best answered by an asset protection lawyer.

A Financial Management course 6.

So you would want the most recent financials from lets say August 2015 to August 2016.  

And after 30 years of a $1.1M paid-off house appreciating in an up and coming town, when I decide to downsize at the age of 65 i'll fund a good chunk of my retirement, or hand off a nice asset to my kids.If you could hypothetically take $100,000 on a HELOC and turn it into $5,000 per month cash flow would you do that?

They include a great lawyer, accountant, electrician, good plumbers, good handymen, these are the people I call on to help lend a hand when needed as well as my wife who handles all of the financial aspects of our business.  

You might look into form some type of corporation or a LLC depending on your financial wealth.  

You're looking for tenants who are responsible (financially, take care of house/pets, etc.), who you can control, and that will be easy to work with.I disagree with other responses.