My question is:  When we sell the house, are we paying capital gains tax on anything we get over $66,500 or over our loan of $134,000?

After adding brokerage, transfer tax, title insurance as well as accounting for any capital expense to replace 20+ year old mechanicals/roofs etc.  

BE CAREFULgenerally speaking NO  there are no loans for beginners with little capital.. try finding a equity partner.

The only reason we gave them a shot in the first place was to raise capital to then invest in real estate!

After adding brokerage, transfer tax, title insurance as well as accounting for any capital expense to replace 20+ year old mechanicals/roofs etc.

@Skyler Chaney Welcome to BP nation and all it has to offer.

@Joy Jones You do understand if anything goes wrong with the flip and the new owners sue, all the capital and assets in your construction company are up for grabs?

I am still a bit of a newbie investor but do feel like I can add value to a project through being a licensed realtor, current business ownership experience (5 years owning an insurance brokerage), and having some capital to invest.

A lower down payment decreases your cash flow (because you'll be paying a larger mortgage payment), but ties up less of your capital which you may be able to deploy elsewhere.

-Cap ex ( capital expenditures, on and old brick building even with new windows and a roof I’m guessing there is significant maintenance).