Hi All,I am learning about owner financing and one of the question I have right now is "how does the tax reduction works in the owner financing". 

2) Discuss a cost reduction or compensation from your builder if these mini-splits end up being cheaper than a traditional system (it's 50/50 if I were to guess). 3) Don't let this hold you up from getting the build complete and rented out.

Plus you get the principal reduction as well - another few hundred in your [paper] pocket each month.

@Nicholas LaytonI do not think is an issue of ignoring all of the other benefits (debt reduction, equity buildup, depreciation, etc.).  

The security deposit increases basis of the property (I get the tax advantage through depreciation but have to lay out cash to cover the security deposit) and the pro-rated rent was a reduction in the cost basis of the property.What have you all of done in these situations?

Any reduction in commission would be pre-tax (and possibly pre-split, depending on the brokerage), so your numbers aren't quite accurate.

Keep all your price reduction negotiating tactics on the down-low until your in escrow and the inspection period is running out.  

Just include cash flow, principal reduction, and some conservative estimate of appreciation (if applicable) in your analysis and you have all the inputs 

Keep in mind, you may have $0 or very little cash invested at that point; so, your ROI could be very high or infinite even if the cash flow is slim.If the unleveraged cash flow is only $250 per month, the predictable appreciation needs to be factored in or it's a better flip than a buy and hold.Many investors use IRR to capture the holistic returns, which include the value add, cash flow, and principal reduction, but it's also good to analyze the post-rehab returns by themselves to ensure that the property is a good long term hold (and not just a good flip).

Will they be able to sustain a 15% to 30% reduction in gross, and still be able to maintain the properties, especially if refinancing/sales is not an option due to a credit crunch?