@Royston McKaig income - expenses (including a depreciation deduction; see a tax pro) = your taxable income.

I converted my property from a three-family to a four and am now having to get a commercial insurance policy instead of regular homeowners -- it's not a big deal, but it is annoying.

Has the current owner been completing regular inspections? 

Coming to meetings he didn’t need to and didn’t even know he was going too, meeting with us regularly at the rental property to go over construction needs, staying extremely on budget and the willingness to work with us on three separate projects is great.

I don't know anything about selling with them to answer your question, but regardless of what they offer, I'd also check in with a regular real estate agent as well.

If not, then I'm not sure why you can't get a regular conventional investment loan. 

BLUF: Mother-in-law has spent many years vacationing in Mexico regularly, wants to buy a beach front condo in Puerto Penasco as a VRBO.

I've read interest needs to be paid, but it's along the same rates as banks pay in a regular checking or savings acct, which is practically nothing, and not a large enough sum to make a dent in your pocket.

For now, my goal is to earn an additional $2,000 a month of passive income (after expenses) within 3-5 years from now, in addition to my regular income.

Tenants would be your regular blue collar, in metro Detroit we have the big 3 so very good employment with future growth and very well paying jobs.