Its ordinary income and subject to income tax at your marginal rate. 

There was also a great podcast interview with Paula Pant on the subject, somewhere in the 30's I believe.

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Is it OK to do subject to investing as a licensed real-estate agent?

Good tenants, a bit subjective.

Buying subject-to existing loans is a practical way to buy property, especially if the seller is financially distressed.

Original purchase is documented by a HUD-1, which confirms that no mortgagefinancing was used to obtain the subject property.

In my head what I had pictured was getting ownership of a multi-unit property creatively, through seller financing, subject to, or even lease option, and again renting out the space i wasn't using and trying to break even or make little profit with the rent income on the mortgage payments.

I mentioned it because it's a subject that comes up a lot on these forums.And you're probably right about your tenant- it sounds like he would for sure be the one you'd want to have gone.

I just listened to Grant's podcast about buying subject to.