Its all legal and now you only have to maintain a place for 5 groups. 1) you can get a heavy cash deposit down for the ownership. 2) they pay quarterly for expenses that funds the overhead. 3) everone has a share of profit when you or they decide to sell for a higher price.

Thanks Dennis, I think you're right that planning for a more conservative return would be a good idea.I re-ran my numbers at an even more conservative level:Lower ARV: $800,000Lower income levels (I'm assuming it will take a couple years to get up to full potential income, but giving myself 3 years was a conservative estimate):Year 1: 50k (NOI $1,000)Year 2: 80k (NOI $31,000)Year 3: 100k (NOI $51,000)My ROI numbers come out to:1% (year 1) 46% (year 2) 76% (year 3)This scenario seems like an acceptable risk to me, when the upside seems far more profitable.

Keep in mind the more you write off the less money you will show as you net.If you have (2) full years and depending on how the accountant files your taxes you will have a schedule C more than likely or another schedule that shows profit and loss.

@Alex Hymanson  you should read the book...Storing Up Profits. 

Private investors want to invest in deals they believe will be profitable.

When you put that in terms of a percentage of your net profit - that is 40% of your net profit going to the PM.

All of the multifamily I have looked at in my area are not profitable due to prices being much higher than rent currently.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $90,000

Cash invested: $25,000

Bought a house this fall in Minot for $90k. Currently have it rented and plan to ho...

Like I see how it could work in a perfect world but i cant wrap my head around the idea that I could be making a profit if I still don't actually own the house and still have to pay down all of the loans.

I'm managing D class properties with a property manager and am making a profit.