With the purchase, the rehab, the closing costs and the holding costs (hard money, taxes, insurance, utilities) our all in is around $200,000, but we have created $40,000 in equity.

If you are raising capital from people you don’t have a prior relationship with, and even people who you do, they would regard you as serious only if you had a professional prepared PPM and Operating Agreement.

- The percentage difference is the percentage the taxes will go up after you buy it.What do you mean by the property has HVAC AND boilers? 

I would also share pros and cons of paying taxes on the windfall versus owner carry.

Since it’s a new build, I was able to negotiate some great perks, like a 5.875% interest rate, no closing costs, a fridge, blinds, and even a backyard firepit.Pros:Good school districtLow interest rateMinimal CapEx and repairs (because it’s a new build)Low insuranceHigh-quality tenants (due to the school district and being a new build)Cons:Lots of new builds in the area, which could drive down prices and increase vacanciesThe Numbers:Price: $290KInterest Rate: 5.875%Down Payment: 25%Monthly Mortgage + Insurance + Taxes + HOA: $1,480 (I got really low insurance since it’s a new build and Alabama’s property taxes are low)Property Management: 10%Rent: $1,800 (this is under market because I wanted to rent it quickly—most units in the area were sitting vacant for 100+ days.

@Chris Kay - Bigger Pockets has an older book now called "Estimating Rehab Costs" that was published prior the pandemic.

Of course to maximize your tax benefit it needs to be sustainable over time. 

@Ray Hage thank you for your example, and can say I've done the same thing for as long as utilities are setup prior to move in, security deposit is paid, and first month's rent in full is paid.

If you aren't familiar with Baltimore, I would suggest it's a hard no and say that you are trying too hard to make cash flow happen talking Baltimore and tax liens and auctions.

And it can work really well for you as long as you pay attention to the statute requirements.In order to defer all tax you are selling investment real estate and buying investment real estate of at least the same value you sold.