Someone please correct me if this is wrong, but my understanding is that your cost basis is not the price you purchase the home for, but rather the market value of the home at the time you converted it to a rental (and then less any depreciation over those 1.5 years). 

Find you a realtor in your market that understands the investment side, then meet with investors at your local REA.

I'm just getting started as a real estate investor and I'm trying to get an understanding of as many different scenarios as possible.

This will help me understand my budget, what markets to be targeting, and how to go about analyzing potential deals accurately

I understand the principle but in almost every case, the property was bought for $X, was immidiately worth $X + 15%, then a mere 6 months later there majically appeared an incremental 20% property value increase.

I can understand a lender not wanting to get into a third position as the LTV increases. 

Has anyone faced landlords who just don't understand that they have to provide a HABITABLE home AND disclose issues like infestations? 

For passing it onto the kids, my understanding is that it's best to have the properties in a living trust so there is no inheritance logistics, it just becomes theirs.

I completely understand that and apologize if I was unclear.

I know this is probably a dumb question to most of yoou but I don't understand if this means is a good time to buy or good time to sellAny tips or advise will be much appreciated Thanks