Two of the biggest challenges I face are that I’m not very liquid at the moment, and the Seattle area is extremely expensive.

For Conventional, you can only use 75% of the gross rent until you have Sched E history for the rental for a net rental income analysis. 

And I suspect their E and O will kick in if this money is lost  just sayin..

They give the benefit of instant liquidity and being able to sell them when you need the cash.

If I were in your shoes, I’d look at the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) to stretch your liquidity while building equity and cash flow.

Cash out refi only if the rental income significantly exceeds the monthly payment and you want liquidity to invest elsewhere.2.You can maybe do a HELOC if you want a smaller loan that doesn’t involve refinancing the entire house.3.

Quote from @Jesus E Martinez: Quote from @Jaycee Greene: Quote from @Jesus E Martinez: Investment Info:Single-family residence fix & flip investment.

@James E. 

Here’s some context: Property 1: >$100k in EquityValue: $325kDebt: $220k @ 2.88% (30-year fixed)Property 2: >$70k in EquityValue: $325kDebt: $252k @ 3.38% (30-year fixed)Extra considerations: - I have $15-20k liquid to use for any of these deals- My current job is relatively stable, but not high-payin- Current properties in TX, living in NY, looking to invest in Mid-West (crazy, I know)- No other debt obligations besides the two mortgagesUltimate goal/timeline: Though a bit ambitious, I’d love to build up the portfolio to 10-20 units in the next two yearsI understand that any/all replies aren't financial advice; all ideas welcome for information purposes. 

.: Hi All,Is there any way to structure a private lending arrangement so that income is considered passive (by IRS standards) and can offset accumulated schedule E losses?