Net income is calculated after accounting for deductible expenses like mortgage interest, repairs, and depreciation.Depreciation is particularly important because it’s a non-cash expense—it’s a paper expense that reduces your taxable income but doesn’t actually require you to spend cash out of pocket.

Listing agents have to do all the paper work to list the property that takes a good hour or more according to my wife.. and as a top producer I can guarantee you she does not sit around twiddling her thumbs.

I'd be happiest being quite an active investor and property manager.Of course, given my wife's job there's a also a huge incentive for me to qualify for real estate professional tax status and (if I'm reading things right) maximize our paper losses.

I would be willing to do business with them again.My overall comment is that they are "Expensive But Worth It".Here's the story:  I wanted to buy a property which had serious bad paper After six months of negotiations with the various parties involved, they agreed to do the deal, on condition that I close in 7 days. 

The 2 best options I've found are DSCR loans and/or a local lender that does not sell the loan (they hold their own paper). 

A guy like @Chris Seveney who has a fund that buys paper if your at 50% he may take a swing at it. 

This scenario is extremely common and while I exaggerated numbers for effect, I have had this conversation with clients and their CPAs and the client is usually surprised when you put the numbers on paper. 

Everyone is happy to put their pen to paper as a cosigner, but the majority of them refuse to pay when they see a bill.

I know many people who have lost money from buying low priced "cash flow on paper" Class C properties (myself included).

@Rajagopalarao PaidiRaj, And even if it looks like it will be cash flow positive on paper that's not necessarily accurate.