Need Tax Help On 2 Properties

[Chris Da]

I will try to be as straight forward as possible..

Good friend of mine knows I tring to break into the rental business, and do it correctly..He owns approx 100+ properties.
He has been now investing in 25+ unit complexes, and selling his single homes, as he is tired of keeping track of all these places, ect..(been doing it for 25yrs.)

Here is the tricky part..I turned him onto a home run complex, which he was able to buy without a realtor for about 300k below value..The deal is done..In turn I bought 2 of his properties from him.

This is where it gets tricky.

Property #1 Appraised @ 91k Single 4br house sec 8 with detached 3 bay garage..Sec 8 pays $1186 month and garage rents for $200 cash a month..Total $1386
He owned the thing free and clear, so he sold it to me for 88k on paper(hud-1)
with closing cost ect line 120 "gross amount due from borrower is $95934.47
I got a regular conventional freedie/ fannie mortgage and payment is w/taxes ins, ect $801 month.