If you are setting aside funds for capex, taxes, insurance, or other expenses that don't occur monthly, transfer those funds to Savings each month and hold them there until it's time to spend them.

He has agreed to pay off the taxes owed.I'm not what steps are required for us to move forward. 

While losses help offset taxes, not being able to count that income towards the mortgage can hurt you when purchasing something new. 

Depending how much you earn you can step up those savings by getting a side-hustle.

It will certainly depend on your sample size as well. 

Things I've got down to minimal effort or fully automated: * Rent, security deposit, and fee collection* Basic accounting and tax packet creation* Listing vacancies* Lease signing* Applications, credit, and background checksThings I'm still dealing with directly ad-hoc or don't have a well defined process or solution in place for:* Requests and communication with tenants* Finding and coordinating service providers for maintenance and repair work* Scheduling showings and getting prospective tenants to make their appointments* Tenant turnover for move in and out* Keeping up with legal changes and lease template updates* Setting rent amounts* Lease enforcement - tenants are responsible for things like yardwork, routinely get letters from the city about weeds / tall grass, etc.Questions for the group:* What am I missing if I were to make out a checklist of an "automated property"?

All they are doing is pre-paying the interest today, so that their "cash flow" can look better.

There's < 2 months of seasoning for the purchase, cash into the deal is ~$975k w/o rehab (minimal planned so far - turnkey), purchased the property for 35-40% below assessed value, 825+ FICO, and would optimally like to pull out $975K-$1.15M of equity.Main scenarios we've thought of to accomplish this are: 1) structure sale of property from SMLLC to self and secure 30-year new purchase financing on deal (unsure if legal and tax implications if above initial cost basis)2) delayed financing (LTV restrictions a concern)3) cash out refi (seasoning concerns)4) DSCR (seasoning and rate competitiveness concerns)5) one of the above plus a HELOC, personal loan, etc.?

Downside on FHA is the Self Sufficiency rule where all units, taken at 75% of gross rents must at least equal the total mortgage payment including property tax, home  insurance and FHA monthly mortgage insurance.

High real estate taxes and older homes requiring a lot of repair and maintenance.