As for expanding, I'm 50 next year and I'd love to be able to retire in the next 5 years.I signed up for Tax-sale.info to see if I can find any bargains in single family homes etc.I prefer to buy and hold/rent rather than flip.

Income taxes vary by person and jurisdiction.

If you guys have deal with similar experience, or have some tips on how to avoid this, please let me know.

Hi, we have a tax deed auction coming up in PA, with over 1500 properties on it.

@Jason F.I think it will be business as usual or possibly even more sellers will use agents because they can potentially avoid paying the buyers agent…It’s not like Fsbo makes up a large portion anyways.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

Between just those 3 items, that's tens of thousands in tax return and lower of the tax brackets as whole. 

How can I avoid this?  

You also benefited from the tax deduction that includes PMI and per your own statement, it's been a great experience until you looked at a recent statement that reminded you of what you once knew but forgot from long ago.Do the math.

At 7.5% your monthly payment is around $1,400 not including taxes or insurance.