I'm considering taking out a home equity loan/line of credit on the house to purchase a subsequent rental property.

lHowever, if @Zach G. wants the benefits of direct capitalization and subsequent depreciation of a real asset he has to have a direct interest in the property itself and not an interest in the entity that owns the property.  

The key is that you have to Buy the max amount of units for your first purchase(4 units) and then subsequent purchases have to be equal or less units.

The home was abandoned and subsequently auctioned.This is in Thomas County, Georgia near Thomasville.

Can you amend your taxes to show a profit (and pay the subsequent extra tax)?

It’s hard to just pick 1 or 2 so I’ll just list a few.Improper economic vacancy assumptions Aggressive year 1 gross receipts projections (they immediately jump the income to new rents with no phase-in which is simply impossible)Underestimated expense assumptionsImproper use of cap rates and/or incorrect exit cap rate assumptions Failure to properly account for property tax reassessment post-sale (in states that do this)Basing exit prices on capitalized value of the income without accounting for the subsequent owner’s property tax reassessmentFailure to account for all of the costs incurred in putting together this type of deal and purchase real estate of this sizeFailure to raise enough money to pay the down payment, closing costs, finance costs, syndication costs, immediate capital improvements and still have enough money left over for capital reservesIncorrect calculations of income, cash flow, cash-on-cash return and IRR and/or a clear lack of understanding of those calculations and how to use themLack of waterfall calculationsIRRs and cash-on-cash returns that are inflated because they aren’t raising enough money—and once they realize that and raise more at the last minute the Projected returns would adjust lower but it’s too late now for the investors to evaluate the what the projections should be because they already subscribed This list is just off the top of my head—if I sat and thought about it long enough I could probably double the size of this list.

Middle scenario, I use a turnkey company to make my first long-distance investment, learn, realize I can do this on my own with better margins and make subsequent deals on my own.

Full disclosure means.. they are concerned about subsequent conveyances of beneficial interest (all or a portion) by the settlor, after the trust was recorded.

For those of you who have owned rental homes and subsequently sold them, I have a question.

Be aware that if you borrow your maximum allowable in order to complete your rehab, that doesn't mean that your home will subsequently be worth 175% of your purchase price!