What that means is that normally once your holding period has passed a year all the gain from that property or subsequent properties is generally treated as capital gain. 

Lending is the blending of the correct numbers to please the underwriters and salesmanship of the borrower to show that the enterprise will be a success. 

- Will an option agreement expire once there is a subsequent transaction?

From I can see it looks like the utility company is supposed to try to collect from the tenant, and then can subsequently place a lein on the property. 

Continue to repeat flips by reinvesting original partner's cash and profits into each subsequent deal(s) until you have your own seed money ($10k, $20k,...?).

If you subsequently need to rehab or need funds for major maintenance expenses, then funds would be available assuming you didn't max out the HELOC. 

However, if the owner and his agent are informed that an inspector has found a large issue, the owner and agent are obligated to inform subsequent purchasers (this is true in every state I am aware of). 

I know how buying a house for a primary residence can become an emotional decision which increases the amount a person is willing to pay... but with attempting to pick up a long-term buy and hold, at least in my experience, the profitably is largely determined at purchase (and of course subsequent to this, proper tenant screening and management of the property).

You appear to be a property manager so I'm willing to bet you follow this same process.You appear to live in Pennsylvania so I will tell you what your state law says: Prepaid Rent: A landlord is only allowed to collect up to 2 month’s rent for escrow purposes, 1 month’s rent during any subsequent years. (68 P.S. §§250.511a.)A recent ruling in PA makes clear that it doesn't matter if you call it prepaid rent or last month's rent or security deposit.

We will subsequently split the cash flow 50/50 each month, and if/when we decide to sell it, the profit from the sale will first go to allow me to get my remaining invested capital back, and then we would split 50/50 the profit after that.So, I have 2 questions -1.