I am very interested to hear the response's on this one Regarding the Safe act and owner contracts for Owner Occ homes..

c) Exceptions The term ''personal holding company'' as defined in subsection (a) does not include - (1) a corporation exempt from tax under subchapter F (sec. 501 and following); (2) a bank as defined in section 581, or a domestic building and loan association within the meaning of section 7701(a)(19); (3) a life insurance company; (4) a surety company; (5) a foreign corporation, (6) a lending or finance company if - (A) 60 percent or more of its ordinary gross income (as defined in section 543(b)(1)) is derived directly from the active and regular conduct of a lending or finance business; (B) the personal holding company income for the taxable year (computed without regard to income described in subsection (d)(3) and income derived directly from the active and regular conduct of a lending or finance business, and computed by including as personal holding company income the entire amount of the gross income from rents, royalties, produced film rents, and compensation for use of corporate property by shareholders) is not more than 20 percent of the ordinary gross income; (C) the sum of the deductions which are directly allocable to the active and regular conduct of its lending or finance business equals or exceeds the sum of - (i) 15 percent of so much of the ordinary gross income derived therefrom as does not exceed $500,000, plus (ii) 5 percent of so much of the ordinary gross income derived therefrom as exceeds $500,000; and (D) the loans to a person who is a shareholder in such company during the taxable year by or for whom 10 percent or more in value of its outstanding stock is owned directly or indirectly (including, in the case of an individual, stock owned by members of his family as defined in section 544(a)(2)), outstanding at any time during such year do not exceed $5,000 in principal amount;"End quoteMy first followup question:It's my understanding that I need not be concerned about the impact of the Safe Act and licensing requirements if I'm using just my money to loan to others, and that I have a broker creating the loan documents.

She just called this morning and said she just wants to move because she does not feel safe there.

I used to consider myself an expert in creative financing techniques as well as using the more conventional means of the banking industry.

See other BP forums on this technique.

Worst case scenario of renting out my current home to pay for the $2200 rental property I will move into:Current home rents for $2200 (worst case) = 1475 income after taxesCurrent Home deductions (as profit above) = 500 (1500 x .33)Current Home Depreciation (@50K value) = 50 (150 x .33)Mortgage Principle Paydown = 480Total Profit = 2505Total Cost (current PITI + new rental) = 4175Net cost of living (Worst case) = 1675/moIf deduction was valued at 200K, then deduction would be 600 x .33 = 200, bringing net living cost to 1525.If rent was increased to 2500, then net cost of living would be 1475.If both rent and depreciation were increased (best case scenario) the net cost of living would be $1325/mo, and I would have the responsibility of being a landlord to a property 1 hour away, but the investment would be safe and robust, with little possibility of losing equity, and some possibility of gaining equity.I know there are other deductions, such as repairs and travel to conduct business.

I like good long term tenants and there are many techniques to retain tenants.

Maybe it is, maybe it is not but I think you have your counter-party ideas sort of backwards.It's safe to say I have sold a loan or two and chatted with both new and experienced note buyers.

And you're right, as a user, I don't care about the legal status of the apartment, as long as it's clean, safe, and has all the amenities it claims it has.But if I own a building, and all of my tenants have no sublet clauses in their leases, then I don't want them subletting.

You might want to use a 10% vacancy rate just to play if safe.