Hi Eric,If you are talking about your personal tax liability (at the federal level), the formula I use is: NOI-Total Debt Service= Cash Flow; Cash Flow+Principal Payments Added Back (on debt service)-Depreciation=Taxable Income/Loss. 

The active BP members in these cyclical markets (1) buy well (2) add value (3) use long term debt (4) maintain reasonable LTVs (5) buy in good locations with high demand (6) hold very long term and (7) have reserves. 

I worked at a student apartment complex and we often saw financial aid as a main source of income for our tenants.

A few other things to consider:-If your plan is to mortgage the second property you should verify beforehand that the refinance on your current primary residence won't push your debt to Income ratio too high to get approval on the new mortgage. 

Love the aspect of leveraging with debt and being able to refinance the initial capital or part of it back out upon completion and stabilization of the building.

My main question and I would like to get input from experienced people is about closing and refinancing cost.

Do you mind being leveraged and using debt?

The main reason why I am "giving her a chance" is because I am not in a good position to handle this turnover at the moment. 

I don't want to repeat everything in my profile but I'm looking at several markets in Texas, Maine, New Hampshire, and Kentucky.Currently I'm active duty Military working in a medical administrative field.

I guess the question is what are the reserve requirements.. and keep in mind they are for your own good.lack of reserves was one of the main reasons investors in the landlording business fail.