He isn't a motivated seller.If it will rent for $1900  a month, that means to make money you have to have a payment that includes, principal, interest, prop taxes, insurance, at less than $1400 a month. $190,000 at 3% interest is P&I $801 + prop tax plus insurance a month.

You filed two full year tax cycles and the numbers are similar (no greater variant than 1%) they maybe yes.Generally depreciation is added back as income BUT only the 40% portion you own not all of it.

A knowledgeable attorney can advise here.Create a solid operating agreement: Since you own the condo with a friend, a clear operating agreement is essential to outline responsibilities, decision-making, and profit-sharing for the LLC.To save on costs:Look for real estate attorneys who specialize in investment properties and might offer package deals for the retitling, operating agreement, and filing the LLC.Shop around for title companies that can handle the transfer smoothly and provide competitive rates.Research DIY options for setting up the LLC if your situation is straightforward, though I’d still recommend a lawyer for the transfer process itself.Good luck with the process!

My principal/interest, escrow, and insurance is 1570, and my HOA is 306 and it includes water.

The guy has already stated that he doesn't live there so that alone proves that he knows that was never the intended use (is their a police report or statement for your file?).

I doubt 10% of the GRM will equal enough to where an S filing status makes sense.The home office and such is nominal so that alone isn’t worth doing this.

As long as you're filing jointly, both meeting the 2 yr use test, and either meeting the ownership test, then the full $500k can be claimed. 

File an eviction with the court and provide the proper notices (e.g., 10-day notice to pay or vacate for nonpayment of rent).

Its hard to do return on investment since we are getting principal back starting year two as we sell..

@tom shallcross summarized this well in another post and just inflate your numbers up for a $665k purchase price and $2300/mo per unit for rent.Borrow 80% which is like $3700/mo for Principal, Interest, Taxes, and Insurance.