IF I sold doing a "Seller Financed Note" of say 175K after a down payment of say just 25K, and then payments that kept my AGI under 100K, I assume the "value of the note" would not count in the current years income, since it has not "been collected" yet?

My interest rate will go up from 2.75% currently to 3.375 and my mortgage balance will go from 262k to 510k.This is about the lowest price I’ve seen on a decent duplex like this that is in a good neighborhood and doesn’t require major renovations.My goal is long term - to be collected $8-10k/mo by 2015.

Lesson #3 - Strategy for collecting inherited debtWhen we were buying our fourplex, we received the rent roll and it wasn’t to difficult to figure out.

@Nick Ferrari-  If you own the house and are looking to refinance it, then you don't have to do anything but collect 75%-80% of the appraised value at the refinance. 

Now that it has been over a year since this incident with no news from the ex-tenant, I am considering to work either through a Collection Agency or a Law Firm to collect the owed money.

So if for example I agree to give the seller 10k option deposit, I might collect 25k from the tenant/buyer.

How much of a security deposit are you allowed to collect? 

I am not sure that you could collect from the tenant as they sound judgment proof.

I am wanting to owner finance the deal so i can collect the total sell price of the land and home plus interest. ( I do not want to offer rent to own) I have buyers waiting on me to finish figuring out my side.

Collecting rents and letting it go into default might be a criminal act.