**I need to pay my personal bills and put food on the table during the development process!

I knew I'd always been intrigued by real estate investing, but all I knew was the "get wealthy very very slowly" strategy, and knew nothing of the "put food on the table next week" strategy (short of being a realtor, which I wasn't interested in).

Hold 1 year of required expenses in an emergency savings account to include: rent, utilities, vehicle fuel, food, insurances, IRA mandated contributions (if you have any) plus anything else.2.

Figure in for that and then if the house sells for even 10% lower than you expect and you're potentially looking at a net loss.

They also probably offset the cost of the warranty by charging a significant premium for the work they did to get this note re-performing.Their warranty also states that they can replace your note with an equivalent note so if one fails and they don't want or have the money to give you your principal back they can just give you another note and buy themselves more time.Their business is also growing at a fast pace and they are betting the growth will offset any losses(low chance of them losing though after the premium, low volume of performing notes, and ability to replace notes) and the warranty helps grow it faster.This is how their warranty makes sense to me.

Underwater 2nds can be a total loss to a 600% return.

After figuring your rental income and other deductible expenses in connection with the property, you had a tax loss each year.However, your annual income from other sources ( salary, interest, investments etc.) was well over the IRS threshold, so the rental property tax losses had no impact on your actual tax liability for those 5 years.Now you sell the property for $150,000.

And I should have turned right around and sold it at a fire-sale price, accepting my loss up front.  

I would figure out what path will generate the largest profit (or smallest loss) given an amount of effort you're comfortable with -- then do that.Of course, this is something that you should have figured out BEFORE you placed your bid...what makes you think the deals are profitable if you haven't gone through the exercise of analyzing them?

So if your S-Corp has never been a C-Corp, you will be fine in that regard.One other thing I'd like to mention - in an S-Corp, you may only deduct losses to the extent of your basis in the S-Corp.