If the property sold today, after 1% cost of sale there's only $2.5 million in cash coming from that sale and that's assuming that there's no exit fee on the loan and no outstanding payables. 

So huge portion of investment is not even depreciable. 2) All the repairs and property management fees etc are real expenses.

As many have mentioned, most fix-and-flip loans allow lenders to fund up to 90% of the purchase price and 100% of the rehab costs, but they typically won’t exceed 75% of the ARV.However, If you're not including a rehab budget, lenders often cap the loan at around 70% of the purchase price, which might explain the situation you're encountering.It’s generally more advantageous to include a portion of the rehab budget in the loan.

Well that is when the lower tenant feels like paying her 20% portion of the rent of $240 per month lol!

You’ll have 45 days from your sale to identify them and you’ll have to buy enough of them, and only them, within 180 days of your sale to meet your 1.1M requirement, or face taxes.

You should find out what percentage of the rent is being paid by S8 and by the tenant.Tenants have to sign the rent increase and some won't because they don't want their payment portion increasing.It's also highly unlikely a S8 office will approve the huge increase from $797 to $1300.- BTW: the $1300 includes all utilities being paid by the landlord.

In his words, this is away around the due on sale clause that you can run into in a sub - to transaction.My question - if the seller puts the property in a trust, will this avoid the potential of a due on sale clause?

Screen them as you normally would - does their income substantiate their portion of the rent +/- a little for changes in what the housing authority will pay out?

(I am looking for private lenders who don't charge interest but rather take a portion of the profit.)I emailed the support desk for a refund. 

If so, it's a good idea to start mapping out both the rehab and refi portions.