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Good afternoon. 1) If the S corp owns the land and the S corp gets the loan, it will be entitled to the deductions relating to the loan and the Rental Property. 2) If both properties are under the same S corp, because New York is a deficiency state allowing the lender to go after the borrower for any shortfall, if you default and the foreclosure sale is not sufficient to pay the loan in full, the lender could go after the other S corp assets. You might want to consider putting each property into its own entity so there is no cross-contamination.

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The expert was properly suggesting that you create a second s-corporation (or more properly, an llc) and have only one property in each entity. That way, the debts and liabilities of the one entity will not affect the other properties.