If you've been watching the recent economic events in Europe, you'll have heard of the Greece debt crisis.

What you are describing is the best way and use those techniques in combination with relationship building and you will win.

This would decrease debt service and that combined with fighting to get property taxes reduced would help your losses.As mentioned what course you take various on your net worth,income,other assets held in the same name or corp,if you are trying to preserve credit or do not care etc.More info on your individual situation would help.

Many of the properties he gets his hands on are through a combination of subject-to financing (simply taking over the payments from the previous owner and renting out the place to cover those payments, plus some), owner financing (old folks with lots of equity looking to retire/move out of the area) and master leases, where he doesn't even buy the property, but rents it from the owner then turns around and rents it for even more to somebody else.

The properties were tenanted and mildly profitable (the owner had large loans and so the debt service wiped out most of the cash flow).

Also, it's a Fannie Mae property and there was mention of closing cost incentives.Had I known of the error I wouldn't have already hired out for the nominal things and saved my money for the things that I HAVE to hire out for.I'm the kind of guy that pays his debts, but the title company AND the realtor were hired by me to do a job because I'm too naive in those areas (the same reason anyone hires any professional).

They use every additional dollar they receive each month to reduce debt service.

. / $4,166.67Annual debt service “DS”Revenues:Monthly AnnuallyRental Income$935$11,220.00 (RI)Vacancy @ 8% ($74.80)($897.60)Net Rental Income $860.20$10,322.40 NRI)Operating Expenses:Property Tax- 1800 (this is being challenged currently, but no ruling at this time)Insurance- 1000 (estimate, I will get a quote on this for sure.)Maintenance- 1200 (Estimate)Utilities- 800 (Estimate)Advertising- 100 (Estimate)Total Operating Expenses (*Very Estimated*) = $4900 (TOE)Net Operating IncomeNRI-TOE= NOI$10,322.40-$4900= $5422.50 (NOI)Total Cash FlowNOI- DS= TCF$5.422.40-$4,166.67= $1,255.73Return on InvestmentTCF/ TCO= ROI$1,255.73/ $5,000= .2511 (25.11%)Cash on Cash (Considering- Down Payment, Upfront Repairs, Closing Costs)TCF/ TCO (W/repairs and closing costs)$1,255.73/ $6,500 ($5,000 DP + $0 Initial Repairs + $1,500 Closing Cost) = .1923 (19.23%)My thoughts regarding this deal: I think the asking price is a little high for the property considering it’s age, condition (off of visual inspection from the street level only), location, what limited comps I could find.

Both Roths and Traditional IRA will be subject to UBIT if either you do debt financing within your IRA (i.e. take out a non-recourse note to help fund a property in your IRA) or if you run a business in the IRA that would normally be subject to taxes outside the IRA.

I'd run away.Figuring 50% expenses, his $4,000 of income equates to $2,000 to service debt and have cash flow.