The point of the article was to scare the bejesus out of me and to demonstrate that the Feds can go after you YEARS later for something small.

Thanks---------------------------------------------------------------------------House Manual: Pictures and demonstration for each.

WOW...Focus... your problems and issues demonstrate that some people might not be the best landlords.

Cap gains will be $0.I would like to map out and present both options to the seller demonstrating roi and tax implications for each scenario.

After seeing the statute, looks to me like investors should see if the could get with a non-profit that is involved with low-mod housing, the Texas Home Investment Program....probably a grant program, if not otherwise restricted.Those saying they only do commercial as they loan to investors or contractors, well, there is no specific exemption to commercial there, defined as any residential home, being property oriented, I do see the argument both ways, I'd tend to look at the bigger picture, a contractor in construction would be commercial, but to an investor who allowed a wrap or lease/option (6 month limit in Tx.) with a homebuyer assuming that loan , may not fly, certainly not after 5.Lastly, my above post concerning prudent lending, I'll guarantee you that exemption at 5 is not a license to do charge high rates, set early balloons or offer loans without any qualifying due diligence, don't need rare occassions and wild scenarios to demonstrate the need for fair and prudent conduct or the need to live in fear while doing RE.

If you get audited, you must be able to demonstrate that you did in fact have the intent to hold for investment purposes as opposed to holding for sale such as rehabs/flips. 

I can quote hundreds of case laws that demonstrates how this asset protection paranoia fails BUT you will need to pay my attorney for the advice.Now all those guys charging for their book, and $$$$  jump in and prove me wrong. 

Tomas thanks for the mention , however I do not solicit business publicly, my investments are only with folks that I personally know and are full time in the business with a demonstrable track record.

I guess what I'm saying is something you already know and demonstrated by your posts, it's that most times nice guys get taken advantage of.

I actually prefer looking at it the way Scott demonstrates it because it's a more realistic view of the hit you take on your profit which is much more applicable in a rent situation being as the bulk of the rent payment has expenses associated with it (mortgage, taxes, etc).In working with thousands of landlords, it is extremely rare (like nearly 0% rare) to see a landlord pay the transaction fee though.