Most important in my mind is #11 where "Wood Destroying Pest Inspection and Allocation of Cost Addendum" has not been selected/provided.

What I like to do in this situation is to allocate a reasonable fixed percentage of the rehab (5-10%) towards "GC Fees" and that will go to you to compensate your employee.

Please correct me if I am wrong.I agree that money should always be allocated towards the best choice for maintaining or increasing its value.

c) Exceptions The term ''personal holding company'' as defined in subsection (a) does not include - (1) a corporation exempt from tax under subchapter F (sec. 501 and following); (2) a bank as defined in section 581, or a domestic building and loan association within the meaning of section 7701(a)(19); (3) a life insurance company; (4) a surety company; (5) a foreign corporation, (6) a lending or finance company if - (A) 60 percent or more of its ordinary gross income (as defined in section 543(b)(1)) is derived directly from the active and regular conduct of a lending or finance business; (B) the personal holding company income for the taxable year (computed without regard to income described in subsection (d)(3) and income derived directly from the active and regular conduct of a lending or finance business, and computed by including as personal holding company income the entire amount of the gross income from rents, royalties, produced film rents, and compensation for use of corporate property by shareholders) is not more than 20 percent of the ordinary gross income; (C) the sum of the deductions which are directly allocable to the active and regular conduct of its lending or finance business equals or exceeds the sum of - (i) 15 percent of so much of the ordinary gross income derived therefrom as does not exceed $500,000, plus (ii) 5 percent of so much of the ordinary gross income derived therefrom as exceeds $500,000; and (D) the loans to a person who is a shareholder in such company during the taxable year by or for whom 10 percent or more in value of its outstanding stock is owned directly or indirectly (including, in the case of an individual, stock owned by members of his family as defined in section 544(a)(2)), outstanding at any time during such year do not exceed $5,000 in principal amount;"End quoteMy first followup question:It's my understanding that I need not be concerned about the impact of the Safe Act and licensing requirements if I'm using just my money to loan to others, and that I have a broker creating the loan documents.

There are a number of moving parts here, including the computation/allocation of gain between the primary residence usage and business usage, so it is imperative that she meet with a good tax advisor that has experience in real estate.The portion that is allocated to the primary residence does not have to be reinvested, so she can pull out cash through that part of the transaction.

Essentially what you are saying is, the IRR = 14.57% of which I choose to allocate 3.37% to pay back/down the invested capital.

Your purchase price, for depreciation purposes, is allocated $70K to land and $210K to depreciable improvements.

Earnest money can be allocated to any use for the specific transaction it is deposited for on behalf of the person who deposited it.

BP'ersThanks for the quick responses.My quick thoughts:#1 The perk for me is a long term investment that will cost me 12k and yeild me a 500k property after ten years (about 1 year after my military retirement date)#2 I allocated 10% in property management b/c i dont have the ability to manage from afar.

The plan will be to allocate his money towards the down payments of multiple rental properties that I would buy and add to my portfolio.