Currently 3 of the 4 units are occupied grossing $2240/mo income.

The hotel has been established for 15 years & the owner has showed my all of his paper work and my yearly income will be $100,00.00 easy so once I can get my foot in the door , I can easily repay my investors it's just coming up with that initial $ 125,000.00 that is my biggest hurdle at the moment .

Also, whether it is rented or not doesn't make any difference in terms of loan on the property, though it might make a difference for your stated income if enough time has gone by.

My thinking is that I need to create a set of business accounts using my name as the owner and flow my income/expenses on these first two properties though those accounts and then have a separate set of accounts for the LLC activities related to any new properties.

None of the three met my criteria (one failing on credit, income AND background), one lied about income, and one couldn't prove income.  

So to recap, in my pretty house model, doing a wall to wall rehab, all floors, kitchen baths, walls will allow me to set a record on the rents, and when it comes time to advertise I attract the tenant with the higher credit/income and  I would like to add that in March I closed on a SFR in Embassy Hills Port Richey for $51,000 A 2/1/1, 1100 SF.   

My primary goal from real estate is to generate passive income and amass a large enough portfolio to quit the 9 to 5 grind and earn my financial freedom.

Another way I've looked at it is we split the net income after expenses before loan repayment 80/20 and they get 80% and pay the full mortgage out of it.  

My experience is that I can rent a two bed/one bath upstairs apt for $650/month.Mortgage - $300 (assumption is conventional loan...this is variable)Maintenance - $32.5 (5%)Management - $65 (10%)Property Tax - $50Total Expenses - 447.5Net - $252.5Quite honestly, I think I could make these numbers look better (refinance my duplex and get cash out for much less for example), but I'm curious what others think.I should probably state that my goals for right now are horizontal income without too much work.

By this are you asking if the 20% interest you receive is taxable income?