There are several different types of income in the US tax code.Two main types are “active income” and “passive income".Active income is money you earn from working, such as wages from a W-2 job or income from running a business.Passive income is money you earn from investments like real estate, stocks, or rental income from your RE portfolio where you earn $ without actively working.Normally, you can't use passive losses (like losses from real estate investments) to offset active income like your salary from a W-2 job.That is unless you are an RE Pro.The reality is, that Real Estate Pro status is just a filing status similar to filing married or jointly.And if you are a real estate professional you CAN use passive real estate losses to offset active income from other sources.To qualify as an RE Pro you must:1.

With “very little income” where is this $8k/mo coming from?

Quote from @Raghavendra Jakkani: The tenant should provide proof of income that doesn't require detective work.

@Austin Tess  @John Clark  Hi Austin,  Great question---I would happy to talk to you. 

Its not a set price per unit or building but rather a percentage of income to debt.

Quote from @Marshall Robins: Interesting question.

It's pretty good but I do have a few questions around the metrics:1.

Hi Tyler, The value and the rental income does come into play with a DSCR loan.

My question is when I file our taxes, will they count the purchase price from 2023?  

Here's an article with additional FAQs on cost segregation studies that you may find helpful and should answer some of your questions above.