just starting out, a few questions

[Alex K.]

This is my first post here. I've been reading some of the other posts and it brought up some questions.

In one post about subject-to purchases, the poster asked about where the 1098 tax form would be sent to. As I understand it, you can only tax deduct interest payments on your place of residence, not an investment property. So why would it matter where the form is sent if it is useless?

Someone mentioned elsewhere that it is better to buy 3 properties at 30% down than one property with cash because you get a better return on your money that way. They gave the example that $700/month rent on a $100,000 house is only 8.4% return. It seems to me that you are also getting the appreciation of the property which would likely bring the ROI into the double digits. Sounds good to me. I realize the appreciation on 3 properties is better but then you are only getting the appreciation minus the mortgage interest rate. These days the appreciation rate could very easily be less than the mortgage rate, so if your cashflow is small on the 3 properties the ROI could even be negative. Anyway, its something we need to think about.

In my area (Reno, NV) the home prices are quite high and it would be tough to find a deal with cash flow. I am working on my first deal right now. It is a mobile home on land that is $20k under market value that I will rehab and rent for 0 cashflow. The fact that the equity will be increasing and inflation will bring higher rent in the future is why I'm doing it. Is this a bad idea?