Lots of information about insurance coverage for lenders within the book I co-authored - Lend to Live: Earn Hassle-Free Passive Income in Real Estate with Private Money Lending published by BiggerPockets.

A quick analysis would place operating expenses for LTR at about 1/3 of rent, so net income before debt service and depreciation would pencil in at $600/month per unit.  

Derogatory items are: Negative Tradelines: 6 Tradelines with any historical negatives: 3Occurrences of any historical negatives: 9For the last 4 months, they have a recurring income of $3489, and non recurring income of $5578 for a total of $9067. 

For investment properties, this interest would be considered an investment interest expense and can be deducted against your rental income on Property B.How to Claim: These interest expenses are typically claimed on Schedule E (Form 1040), where rental income and expenses for investment properties are reported.Limits and Conditions: The deductibility of interest is subject to various conditions and limits, particularly with the Tax Cuts and Jobs Act (TCJA) affecting the deductibility of mortgage interest.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions.

If this STR business is viable, or if there are better options for shielding W2 and rental income, I am funded and ready to roll.

The loan would be based off of the cash flow or return on investment of the property itself instead of your personal income.

Its not really a "tax break" - but one of the advantages of a cash-out refinance is that the cash-out is technically a new loan, not income, so its not subject to any income tax. 

I have been able to save 5-20% more of my income per month than I normally do (depending on the country), and Argentina is the cheapest country we've been to yet! 

I'm a former CA resident and moved to Nevada (Lake Tahoe / Reno) because the housing is less expensive, no income tax, landlord friendly, and one of the lowest property taxes in the country.