But when you do the IRS sees that as taking profit so you pay tax on that amount. 

I was wondering if anyone ever tried to make a deal with an owner where they purchase the property for much below the asking price, pay for the rehab and then split profits above a certain sale price?

After going back and forth with price twice we are about $8,000 apart and I am not as comfortable absorbing this difference by my profit.

I found an 8-plex for $250k with $55k profit per year. 

You can buy a property but all income, expenses and any profit stays within the IRA. 

In terms of wholesaling you need to be close on your rehab estimate but you do not need to be exact, I'd say its more important to be positive you have a deal and more about presenting a range of repair value to a buyer that is not made up or intentionally low to help drive your margin. 

WHile im supportive of the policy, and knowing who is in the neighborhood, a yearly fee to keep an excel spreadsheet, with a fine, seems to me to be a profit point for the HOA management company.  

Government runs the school system and the government is a business.....The profits from the high tuition benefits the schools, the government, and the banks. 

Planning on partnering with my cousin on a property and since obviously we file separate tax returns, I figure it'll be easier to manage profit sharing through the LLC.Whether or not we buy the actual property through the LLC is to be seen, but based on the bit of research I've done, that is unlikely.

With that said, the margins are quite small, however, I'm sure there is room for improvement and appreciation.If you could, please, I'm not quite understanding the Management fee (I understand the 6% being on an annual basis of the $18.6k) - but then there's the $750 placement fee and 50% of the rent?