My wife and I are self-employed, make between $200K-$300K in earned income and some unearned ordinary income, and have a good bit tucked away in our SEP and traditional IRAs and plan to continue to put money in them in subsequent years.

In his latest book, “Real Estate Note Investing,” he breaks open the “black box” of the financing side of real estate and shows ordinary investors how to think “like a bank” so they can do more deals and be more profitable.

Originally posted by @Brit Foshee:@Bob BowlingWhile I can appreciate someone who owns 40,000,000 in real estate, I'd have to disagree that "Cash Flow is for poor investors"I don't know a single poor cash flow investor unless they're just getting started or didn't actually cash flow.Appreciation is nice as long as things are going up. =)Cash flow is only good as long as it is coming in. 

@Brit FosheeThank you for your suggestion. 

Deficiencies  were outlawed during the crisis but that has sunset.Also the lender once they do this can do a 1099C which delineates how much they lost and its EARNED ordinary income to you.. so now you have federal tax issues to deal with.. so thats the bad that can come from strategic foreclosures.. they work in CA OR WA NV AZ those states i know for OWNER occ loans its against the law to seek a money judgement but you could still have the 1099C issue to deal with although in those states if you bought after the crash your probably not running into the issues you describe above. 

I am biting the bullet on the last flip and will pay ordinary rates, I have a good use for the money so the tax cost isn't my biggest concern.  

As a new wholesaler I would recommend that in every contract you write that you have a contigency in there or a proviso as you put it (bloody brits :D ).

In addition to the ordinary TILA remedies, a consumer may recover all finance charges and fees paid on the transaction unless it can be established that the failure to comply was not material.

It's been discussed here before, but just because you hold for 366 days doesn't mean you're exempt from paying ordinary income taxes...

However, a negative in relation to state taxes is that if you are distributing dividends from a C-Corp, states typically don't tax this at a different rate than ordinary income.I will say that IN GENERAL, I would still stick to a pass-through entity.