With the caveat that he doesn't have to purchase a CapEx items early based on monthly set-asides or rehab a trashed property beyond normal wear and tear.So in Joe's defense, your question is asking for "Net Cash Flow" which will include the need to factor in all cash initially invested being out of the deal.

We got wind of it through one of our Broker contacts.. the issue for the land owner is he had taken roughly the same option payments yearly 150k And now with the option failing he was going to have to capture all that income as earned income and pay tax.. ( which of course he is kind of like a lottery winner the 150k a year was always gone in 10 months) So he was in a potential bad spot with IRS and we were able to step in and take over the option for the same terms.

You're still putting in a kitchen, bath, HVAC, electrical, etc. which are your larger cost items.

And we negotiate fees along the way for new items.

This is defined as those with gross receipts of $25,000,000 or less for a three-year period.Claiming Interest ExpenseIn order to capitalize on your interest expenses, taxes must be itemized, and investment interest expenses are to be listed under Schedule A on Form 1040.

@Chelsea Allen You raise two items here:1.

I get that monthly cash flow on the investment property isn’t the only factor and that real estate always goes up and now a days - going forward will probably just go up in a vertical line indefinitely, but if I don’t intend to sell the property due to tax purposes I wouldn’t be capturing the price appreciation, it would be the cash flow. idk, I’m probably overthinking this lol.

It is an exciting strategy to capture both cash flow and appreciation that the Southeast has generally been experiencing. 

Since I posted this, I have had a few conversations with my mentor and other real estate investors/lenders and have a much better grasp on action items when the right deal comes along.

Vendor was scheduled a few days later to remove all items to property line.