without some sort of break down its hard to say.but as others have stated there could be pre paids in there as well which is not a cost of the loan per se.

Maybe what you have most closely resembles a property management company in which the PM company collects rents, pays expenses on behalf of owners out of rents, and then remits net rents with a statement to owners.I don't necessary think that's optimal as you'd have to charge a fair market PM fee and would open yourself up to SE taxes on what sounds like it would otherwise be rental real estate income.You should talk to a CPA/EA that will sit down with you and have the deep conversation about an optimal way to structure things taking into to consideration everyone's facts, circumstances and goals.

Here is the Zillow listing - https://www.zillow.com/homes/12005-Sugar-Mill-Cir-SE-Huntsville,-AL,-35803_rb/190833456_zpid/ What made you interested in investing in this type of deal?

Here is the Zillow listing - https://www.zillow.com/homes/12005-Sugar-Mill-Cir-SE-Huntsville,-AL,-35803_rb/190833456_zpid/ What made you interested in investing in this type of deal?

@Kelvin Duen, I focus on SE CT where the numbers (especially prices) are far more approachable.We recently offered on a 12-unit that was on-market.

I recommend that they setup an LLC and when they expect their net earnings to exceed what a reasonable salary is for agents in their region, then I recommend electing to be taxed as an S-Corp, so that they can set their salary to the reasonable amount and fix their SE tax at that level.

Not really his problem per se, since he didn’t cause the damage, but I’m don’t want to cause problems between tenants either. 

The SE corner foundation is cracked.

This is bit of a short notice, but we have a small meetup group in SE CT and we are meeting tomorrow night at East Lyme High School at 5:30.

Ordinary income subject to SE taxes.