If you make passive investment such as private loan - there would not be any issues with UBIT, all income will be sheltered from taxes.

I also would not have told him you were selling it because if you do deduct things from his security deposit he will complain that, "you were going to improve that, or fix that anyway to get it to sell."

I have someone in mind that could make a great potential private investor.

Love your strategy to start with a small multi-family - if you're able to secure and FHA for owner / occupied, you'll be well on your way to success.

I also drive a car that I don't really like with no options because it had the best discount since no one want.HoweverI have many friends who hate the feeling and buy because of the security of "owning" provides.

I am also planning to likely do a flip to see how it goes as I have already built some relationships with local wholesalers and have a private lender or 2 lined up for once I land a good deal. 

And if I get 24 months interest only payment on the private money loan, 2 years from now I should be able to refinance the loan into a conventional one, given that I'm getting a good deal on my property.

If so, I'm not sure the banks will offer a cash out refi on one particular property (to pay off the private loans) if they see you still have multiple other mortgages out there???

Where it can become really tricky is that I have heard of one instance where the delinquent owners didn't file the exemption then after the sale and 6 month period were able to claim some reason as to why they weren't able to file the exemption and were able to get their property back after improvements were made.The court does require that anyone redeeming a property pay 25% interest on the purchase price plus expenses to maintain and secure the property (not upgrades).

I’m looking for private money lenders, willing to work with newbies.