I can explain why, because I buy Subject To.

We do land entitlement so we control all sites and tie them up until zoning is approved. we don't buy land that we can't entitle first

The first is that there's no consensus between tax professionals, and the second is that you will not like my personal interpretation.My interpretation is:Until the property is "placed in service" - everything goes into basis.Illustration.You buy a property July 1st.You finish rehab November 1st and put the property on the market.Your tenant moves in January 15th.The property was placed in service November 1st, and it does not matter that the tenant did not move in until the next year.Everything paid between July 1st and November 1st, including interest and utilities, goes into basis.

Hey Khyree, is your intention to "wholesale" or are you trying to buy a fixer? 

Our goal would be to buy something in the next 2-3 years. 

We can buy the house for maybe 125k and he estimates 120k in renovations.

I have been buying and dealing with Real Estate for about the last 30 years.

I know a great agent in the area who helped my friend buy in Ogden and did a great job negotiating.

Investment Info:Small multi-family (2-4 units) buy & hold investment.

Those that cannot weather the storm get wiped out.Having cashflow positive properties provides a margin of safety you just do not have with negative cashflow.Why are you focused on buying in your backyard?