The adjusted basis is equal to original cost + improvements - Depreciation taken on your return.You can look at your prior year tax returns to see how much basis was taken.See Schedule E - Line 18 - Depreciation Expense or Depletion>You may be able to exclude all/portion of the sale of the house if you lived in the house for 2 out of the last 5 years.I had to spend a few months fixing up the house before I sold it.

@Arthur Voskanyan If you have rental income (Schedule E), it's added to your W-2 income to "put you in whatever bracket."

P E A C EHasan

Make sure it's recorded so you can e-mail to those that couldn't attend!

Consider a HELOC a credit card secured by R/E.  

My goal is to buy an undervalued piece of property, fix it up, live in it and use the equity I put into it to continue investing in R/E.

@Ryan E. 

@Dave Crussel @Thomas E andrewsGreat to meet you, looking forward to more meet ups and helping each other out.

Hello,I have a house that was flooded in Harvey (Aug. 2017) for the first time (to my knowledge as I bought it from a wholesaler with no disclosure) .The house is one story with three bedrooms (one of them is a master suite) with a very reasonable living space and backyard.I rehabbed the house and it looks great now, ....nobody would buy it :0(The house is near the medical center in Houston (in a subdivision called parkwest near Westbury) If I rent it it will create a -ve cash flow of about $300I'm thinking to turn it into Senior independent living but it seems to be very complicated strategy with the best yield.Any experience in doing this in Houston would e appreciated?

Wow, thank you for all of your advises, specially to @John Underwood , @Randy E.