I put 25% down, paid closing cost, rehab and carrying cost.

Loan Info: Owner is carrying note for $285,000 and I'm putting 50K down. 15 year loan @ 4.35% -- W/Tax, ins, ect -- my payment is @ $2150/MO.The 2 BD/1BR's rent for $600 for upper and $500 for lower (although they are the exact same layouts).

I will obviously disclose everything to the lender and make sure that my DTI still stands acceptable (and I have seen the HUD requirements to get a carry-back approved, and met them all). 

We have used a combination of niches: fix and flip, fix while occupying, quick turn wholesale deals, sold on lease option, carried back second mortgages for cash flow, bought with owner financing, bought from MLS, used direct mail, door knocked pre-foreclosures, went to courthouse steps to see if the auctions were for us.Now we are working to...um...

Ask them to give you your main constraints... 1) minimum down payment % by property type (will vary for condo, SF, 2F, etc) and 2) the max loan amount you can carry.

Chris T.While we are not flippers, we do use a similar approach by purchasing tired properties and forcing appreciation: it is just rehab-n-hold as opposed to rehab-n-sell.When we are carrying out a deep retrofit on a newly acquired property, we will put a sign in the yard advertising another "modern, heathy and energy efficient home in the making"  with an indication of when it will be available for rent.We typically have the units rented before the renovation is complete.

Here is a blog where I wrote about a recent 42 unit we bought and did creative things to add value. https://www.biggerpockets.com/renewsblog/bought-multi-million-dollar-apartment-complex-age-26/Just a few ways to produce ancillary income:- Laundry Coin laundryDetergent/laundry essentials in a vending machine in the common area laundry rooms.Rent individual W/D to each unit-Parking Garage parkingCovered parkingprime spot parkingJust plain old charge for parking-Renovations Interior units upgradesCommon area renovationExterior upgrades for curb appeal-Vending machines In common areas such as exercise room, pool house, laundry or leasing office-Trash pick up service In high-end buildings they have a service where you can set trash outside your door and for a fee maintenance will go around each night and collect it so the resident doesn't have to carry it to the dumpster.

So spend $70K for rehab, plus how much for down payment, cost of capital & other carrying costs?

if your net passive losses are greater than the net passive loss allowance, then you "suspend" the amount of passive losses you can't use and carry them forward to the next tax year.  

Perhaps the owner would carry for a year or two until you can get a bank to refi and take out his loan.