I assume that there are a lot of folks who may have a self directed IRA with signfiicant funds that might be good lenders for our projects where they good earn a great secured rate of return etc.I assume the pooling of several IRA funds would lead to some type of security registration requirement, so hopefully there would be folks with large IRA's as they convert out of their 401k's etc----ie. $1-5 Millon etc. that might see the benefit of putting 10-20% of their money to work in property mortgages on good lower LTV, cash flowing properties.any real life examples discussing costs of borrowing, terms etc. would be great.thanksJeffrey

Of course you could be a RE professional (as classified by the IRS) allowing unlimited write-offs against both passive and earned income, but less people who are investors qualify for this distinction. did a lot of good business in the Go Zone, but have also fallen victim to uncontrollable circumstances, such as sheister builders and so called lenders.Congrats on some of your successes, that is comendable!

Brandon, Passive income does not change its character just because it is earned by an LLC.

You get a lot of learning and earning done in this process while limiting risk to just a few dollars (my students risk only $50) max on any one deal.

The calculation is a conservative estimate of what you will earn on average per unit given infinite time.

Anything you did prior to the property being ready to rent, are considered part of the basis for your property being put into use for earning income.

However, you can earn 10-15% of the gross scheduled rents by doing the management.

Otherwise, not necessary)Mortgage PayableTenant Security Deposits HeldEquityTotally depends on your structure, but could be:Owner Contributions (for sole prop)Owner Draws (for sole prop)Member Contributions (for LLC/Partnership/Joint Venture)Member Draws (for LLC/Partnership/Joint Venture)Capital Stock (for S-Corp or C-Corp)Additional Paid in Capital (S-Corp or C-Corp)Shareholder Contributions (for S-Corp)Shareholder Dividends/Distributions (for S-Corp)Retained Earnings (all forms)If a few number of partners/members/shareholders, then one Contribution/Draw account per person/entity.  

In some jurisdictions, work without a permit will earn you a notation on title and you will be unable to sell the property until it is cleared.If the property is not zoned for three units you would be looking at the costs and delay of a request for a zoning change.   

That's 10k off 100k plus $2400 from the $200 a month.In the option to buy agreement I would also state that the buyer is to pay closing costs.So at the end of the lease agreement you sell the home to the buyer, at the agreed price, or you pocket the non-refundable 10k and the rental income that was earned.