Both these businesses are non-real estate businesses.So here's my advice:My advice is to talk to an attorney AND a CPA, because your decision intersects state and federal tax laws.

You will receive a monthly return regardless of the property's performance.The risk here is non-performance by the property owner, but you can have the title company or closing attorney hold a quit claim or warranty to be recorded upon default.When buying and holding, I prefer to have money partners to use a debt financing arrangement if they want nothing to do with the property.

Also, banks charge a higher interest rate for Non-Owner Occupied (NOO) loans.

It's my understanding that we will need to file a partnership return and he'll also need to file a 1040-NR that will require quarterly filings on his RE earnings since he is a non-resident alien filer.

We reported this fee in box 7 of the 1099-MISC as non employee compensation.

I guess my situation could be worse, but I have a great multifamily under contract which very conservatively needs about $20k worth of work to be 'nicely' fixed up- new stucco, paint, carpet, updating bathrooms and ki...

I am clear with them that the app fee is non-refundable and that we do run a credit check, not to check their credit score, but rather to verify the information they put on the application.

We are looking to buy only one non-owner occupied property as an investment and are looking at bottom of the barrel stuff, so I don't think a team or investment specialist would be interested in dealing with us.

Most loans are non assumable - if you went to the bank, they would likely tell you to get lost.

On the non-permitted unit, can you move that tenant to a unit that will be freed up by one of the two in default?