The place was move in ready. 2bd, 2+bth, living room, great room with fireplace, upstairs loaf with very high ceiling, back patio, and garage.

When you act as a private lender you're receiving ordinary income taxed at your current tax rate.

If you tear it down and can't rebuild use the slab for a small shed or make it patio if that makes sense.

@Steve Babiak,@Manolo D.if the windows are replaced i believe they are recommended to follow the EPA RRP laws. but as i said, in NJ a window replacement does not trigger a permit, it is considered Ordinary Maintenance under the UCC ( Uniform Construction Code ) which is what new jerseys follows and adopts the New Jersey version of the ICC Building and Residential codes, along with other codes. but every States code is different. there are two other factors to look at - is the place occupied with any children under 6 ?

Such conversion need not comply with the requirements of the following specific provisions of this chapter: (a) Section 13-196-660 (height limits); however, in frame buildings, four or more levels of living space shall be prohibited and in buildings of ordinary construction, with or without attic living space, five or more levels shall be prohibited; (b) Section 13-196-050; however, all dwelling units must comply with the exit provisions of Chapter 13-160 except basement dwelling units may have a second exit through a room containing a heating plant; (c) Section 13-196-670 (stairwell enclosures); (d) Section 13-196-680 (corridor enclosures); (e) Section 13-196-690 (dwelling separations); (f) Section 13-196-710 (basement ceiling construction); however, if the basement contains a dwelling unit the entire basement ceiling construction is to be wood lath and plaster of half hour construction; (h) Section 13-196-720 (heating plants); however, basement apartments are to be separated from heating plants with partitions of one hour construction.

What ever he is comfortable with but illustrates that the money is pledged to the transaction with no further underwriting.Additionally, do not sign the note in advance...you don't have the money yet silly.Then manner in which you approached the paperwork is a little out of the ordinary and that might just have the agents and bank scratching their heads.

Now I am thinking about purchasing folding patio doors.

Income from wholesaling is taxed as ordinary earned income, NOT capital gains.

So now we are onto the backyard:There are cinderblock walls, a pool, and a patio cover that needs some love.

@Marc Biedenkapp  from my limited expoeirnce when you buy them you need to set them up on your schedule C as rentals day one.. if you do that you get long term treatment.. if you intention is to buy and flip.. ordinary income