If the taxpayer works fewer than 500 hours in all significant participation activities combined, overall losses from the significant participation activities are passive, but if there is net gain, a portion of the gross income will be recharacterized as nonpassive.

@Kirsten MiklethunIt depends.If your Modified Adjusted Gross income not counting the rental is below $150,000, you may be able to offset some of the losses from rentals on your income.If you can't use it this year - it gets suspended and carried forward.

Let's say the property is in a B area that's desirable, older building, and has a lot of deferred CapEx (structural [like floor joists need to be replaced, brick work needs to be repaired, few walls in basement reinforced] roofs, etc) and all units need to be completed updated--it's a value-add opportunity through and through, as rents are also well below market.Collected income from T-12: $66,800Operating expenses from T-12: $30,200 (does not include CapEx or debt service, ~45% of gross income)Resultant T-12 NOI:  $36,600As-is potential annual income: $78,000 (basically, if the vacancies were filled and 100% collections on rents)Assumed market CapEx:  6.5%After repositioning annual income: $112,800CapEx required to reposition:  $200,000If we use a simple T-12 valuation at 6.5% cap rate, that'd be $36,600 / .065 = ~$563,000 valuation. 

Example: we bought a 2 unit property in 2010 in CA that grossed $1,400/mo total at that time.

EXP pays your sponsoring up line based on a percentage of your gross commission income.

For most people, they are capped at $25,000 net losses to write off on their w2 income.HOWEVER, it sounds like your wife is making a lot of money and the $25,000 net loss deduction is caped and completely disappears with individuals making a modified adjusted gross income (MAGI) of $150,000.

Often you can pay a little extra upfront to reduce or avoid pre-payment penalties.If a conventional loan won't cover rehab, consider bringing in 1-2 partners who can cover it.As far as a quick evaluation, what you said is close, but technically what you want is: annualized gross rent (which already excludes vacancy, as opposed to potential rent, which does not) minus 50% for operating expenses. 

I spent years advertising on CL and Zillow and found that 85-90% of the people didn't even read the ad....they just saw a unit was available that matched their price criteria and they called.........Just so I could explain to them that in the first two sentences of the ad it says, No smokers of any kind, no felonies or evictions ever, and your gross monthly income has to be 3.5x the rent.    

We have 35% lower inventory from last year, but our gross units sold are only down 1%.

For instance if I know the property will need a new roof in 2 years...if gross income is $2000, would I put 20% in the CapEX field?