That could help your W2 income out and maybe make you look a little more appealing to the banks. 

If they're telling you that you need to take less profit because that's the only way the IRS will allow it to be done, they're just flat out lying to you. 

Lying to the sellers, not being transparent or honest.Here is one guy that asks how it is done and you all are too high and mighty while I am pretty sure you are doing it the wrong way too.

That's lying. 

The profit potential is really appealing.

IMO you should find one that is being sold by people who don't lie and allow for an inspection period so you can bring sub contractors through until you know the numbers off the top of your head

We were able to add value to the property by not over paying.Using sweat equity to learn and ensure costs were controlled.Targeting the renovations to what would attract good tenants and appeal to the family decision maker when deciding to rent from you.

The new investor owner loves it & picked up the rear lot (66x100 with rear lane access) for $2,000 at the tax lie auction.The one below was built in 1830 & it's supposedly haunted BUT the now long term tenants love it....the wall studs & floor joists are adzed Oak tree trunks.Again we rented it until paid off & the current rental income is high & the contractor tenant does all the maintenance/restoration hoping to eventually buy it. 

But hey, it's not lying, or the ugly f word, fraud.It's "puffing".

If the idea of diversifying part of your tax-sheltered retirement savings into a real asset that has potential for income through both cash flow and appreciation appeals, then it it worth checking out.