When a property averages less than a 7 day rental period over the course of the tax year and qualifies as a non-rental activity, and non passive tax treatment, how is the rule about personal use affected?

You need to find another PM.Training the tenants - is the key to successful rental business.PM has to be strict with your tenants - this is the relationship business and something is wrong with their relationship, which is not good for your money.Late fees might not cover the delay in your payments (mortgage, taxes etc), and it's really not the best time of the year to start evictions, especially all of them.Sorry for all that mess :(I'd also check on the management company - they supposedo have separate trust account just for your rentals.

As I believe I would be subjected to transfer taxes. 

I'm sure they are using that mortgage as tax incentives. 

I have over 50% equity in an 800K primary residence, but as lenders are looking at my DTI, things seem distorted by the low income on tax returns,  and I'm being told there is no way I can qualify for a 30yr fixed.  

I had maybe a couple thousand dollars in the bank account, most of it I always park into the Stock market and I never pull out now because I don't want to get capital gains taxed, and I started to look for someone to partner with on my first deal.This was all about a year ago...

My questions is, since they are on the deed will they have to pay capital gains tax if I where to sell?

Purchase Price: $374,900.00 Purchase Closing Costs: $0.00 Estimated Repair Costs: $0.00 Total Cost of Project: $374,900.00 After Repair Value $374,900.00Vacancy $420.00 (10%) Repairs $210.00 (5%) CapEx $210.00 (5%) Water & Sewer $300.00 (7%) Insurance $200.00 (5%) P&I $1,509.41 (36%) Property Taxes $347.25 (8%) Total $3,196.66 (76%)Monthly Income: $4,200.00Monthly Expenses: $3,196.66Monthly Cash Flow: $1,003.34Pro Forma Cap Rate:    8.04% NOI $30,153.00Total Cash Needed $93,725.00Cash on Cash ROI 12.85% Purchase Cap Rate  8.04%

My initial plan was to cash out my 401k and pay the 10% "dummy" tax.

Henry the 8th, I am, I am ... whoever is born (records) 1st is more senior, those born (recorded) after are Junior to them ... and 1st lien is not always the most Senior either ... the tax man has been around forever and always takes his cut first :)