If you are investing in c or d neighborhoods, you will probably want better than 1%.

I would bet on buyer refinancing and sending me a nice check (if interest rates won't skyrocket)...:)@Bob Malecki thanks Bob.

Income is reported on the appropriate schedule (usually C or E) of the owner's Form 1040.Partnerships DO file an annual report of income on Form 1065.

I have seen brand new habitat homes built in the hood that given the age would be A's but given the neighborhood are C or D..conversely we see 100 year old homes in need of repairs in gentrifying areas that are A all the way.. its a combination.Account Closed  well said.. although I am glad to say as a C student I think I ended up on the shinny side of the penny.

Other things I’ve heard of is using a captive insurance company, but that’s more for the big guys who make a lot of money (think 500k plus) or putting properties in a C or S Corp and paying yourself a dividend.

But, if you put little down and have unrealistic expectation about rent price and unable to receive rental income in a C or D neighborhood, expect trouble ahead. 

The idea that an area 'might' gentrify in the future is not something to bet on when you're just starting out.

I'd prefer properties that are either class C or class B, but would be open to all deals. 

Which is why I'm here.My best guess is that, worst case scenario, a new A/C or heat pump would cost about $4k (I had one installed in my own residence last year).

You could sink that money into some massive project, but that would be tons of work.