Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

I recommend finding a tax strategist who specializes in real estate taxation and tax planning.You may want to consider working with your accountant remotely to expand your options.I would also recommend looking for a accountant willing to work with you throughout the year.

However, after running the numbers accounting for insurance, PMI, taxes, vacancy, capX, property manager, etc. the property is estimated -1.85% cash on cash return (-$600/mo) once I fully rent the property.

As long as you're slightly under market you shouldn't get much pushback on rate increases (just blame it on taxes).

@Raheem Mills so please check with your accountant as tax laws have changed.

Prepaid items are comprised of property taxes and insurance and prepaid interest.Property taxes and homeowners’ insurance will depend on whether or not you have an escrow account, when you are closing, and when those items are due.

I’m originally from NYC and I’m currently working overseas for nearly 10 years as a Construction Manager and have been enjoying my time here as well as my family (and the tax benefits too!!).

And the IRS will ignore it for tax purposes.

Also, I’m not into tax evasion necessarily but she’s owned the place forever and has minimal taxes.

Purchase price: $33,435 Cash invested: $33,435 Acquired this property through delinquent property tax investment strategy for $11,265.