It's also secured so that ordinary tenant abuse can't bring it crashing down on top of anyone.

My take on tax is that if the $15k is treated as rent, ordinary income tax rate applies; if it is treated as purchase price reduction which lowers the cost basis, capital gain tax rate applies as you have held it for more than one year.

Flipping income is NOT capital gains -- it's ordinary income that will be taxed at your marginal rate.Second, once you have two years of tax returns indicating this income, most conventional (and pretty much all portfolio) lenders will allow you to use this income towards your DTI.  

Well, there won't be any cap gains, it'll be ordinary income.....development/flipping verses long term investment gains.

Any interest they receive, of course, will be taxed at their ordinary income rate and it will take away any child tax credits and stuff they would normally qualify for, if the interest they receive is more than $600/yr each.   

If you know what the norms are anything out of the ordinary jumps out as a potential opportunity that might be worth investigating.

In Detroit, these deals are very common so it's nothing out of the ordinary.

Originally posted by @Brit Hale:@Anthony Dooley poor logic.

That ends up being a big time waster as I check out stuff that isn't even close to what I asked for.I don't know if it is because they don't listen, or if the majority of people simply can not tell the difference between a good deal and an ordinary price on an ordinary house.I've had agents try to tell me that the $275,000 house they are showing me is just the same as the $200,000 price range I asked for because "the payment is almost the same" (maybe in his checkbook.

And the interest is taxed as ordinary income.One additional thought on using the 1013 which you probably explored as well - there still some timing restrictions but using the same scenario you could add to that a refi of your house and purchase your new properties in a reverse exchange.