This is probably the most efficient and profitable route to you. 

If you sell it and gained significant profit from the sale, you will have to pay capital gains tax.

I'm very new to real estate investing as a profitable business versus a hobby and have a lot to learn so I'm anxious to hear any insights from you guys.Thanks,Virginia

You have to sell to earn short term profits and hold some for your long term gains.

Property #22-unit Property in Queens, NYEach unit is a 2br/1baAnticipated gross rents: $3.6k/moOperating expenses (per month):- Vacancy: $180- Repairs/Maintenance: $70- Taxes: $295- Insurance: $135- Property Management: $180 (did this at 5% of gross rents because I can manage the property myself but I’d like to set aside a portion in case it makes sense to transition to management).

So, for the tenants stay you would make in profit 3000 more.

They paid tax on $450K but sheltered the other $340K of profit, eliminated their mortgage and ended up with passive income for the rest of their lives.Option 2 would be To sell for $850k and generate $550K in cash. 

My partner and I will split any profit 50-50. 

As a private lender, how do you report the profit you make for tax purpose?

You are buying less than what you sold so the IRS views that as taking profit (boot).