If you're a dead set on being a passive investor, it may take you longer than if you view it as a business and you are involved in it day to day but that's just a guess.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $115,000

Cash invested: $33,396

Sale price: $225,000

Contributors:
Peter Vekselman

Partner Driv...

Adding additional assets, a familiar market, buying a house "for free" as I call it, and gaining experience with lower level of risk How did you find this deal and how did you negotiate it?

Pay off the promissory note when you sell and put all of your gains into the new property which will defer your capital gains.

My other options appear to be limited and would most likely renovate, sell at ARV , pay cap gains and then reinvest the proceeds into hard money deals or commercial RE… Thanks again guys ….

I would be looking for a deal right now where you gain $100k to $300k instant equity and cashflows. 

The guy who owned it was a SEPTA pension retiree in PA who wanted more passive income.

I'm Emily from the Urbana/Champaign Illinois area, passionate about real estate investing for the past couple of years - passively, and the past 5 months or so - actively.

If the property is treated as passive, then, you are correct, that it is not eligible to offset other forms of income.If the property is treated as non-passive(active), then it will be eligible to offset other forms of income.

However, if all the properties gained the same appreciation, say 5%/yr, that would mean that the 1st REI would have gained $5k in PV/equity after the 2nd year, while the 2nd REI would have gained $25k in both PV and equity.IF you start with the same $100k in cash, spent it all, and look at this from the perspective of percentages, you would have the following:  100% equity vs 20% equity from the start, the 20% equity gives you a better profit, total PV and CF.1 - Cash flow that is 10% of the PV vs 5% of the PV, the 5% of the PV is greater than the 10%.2 - 80% debt vs 0% debt, the PV is greater for the 80% debt.