In other words, set it up like an insurance deductible.

We decided to go ahead and insure for rebuild value, but we are in the process of increasing our deductible to lower the payments.

I am all for diversified areas and long distance investing, but when I do it it will be in areas that I have an interest in visiting or possibly living in - then I can take tax deductible trips to them etc.

Do we both get mortgage interest deductions and depreciation?

I also see margins of 8% to 25% on public REITs (whats left over after deducting expenses from rent).

Jason, I was also thinking along the lines of 20% to 25% as a fair rate because an unsecured loan should get a higher yield than a secured loan.My main problem is that I need the IRS to agree with the rate we negotiate because the interest payment is tax-deductible to my LLC while the interest earned is not taxable to the lender because of some specific rules that apply to it.

That could amount to a nice side income via cash flow, plus the tax deductions and the principle reductions.You can also incorproate some rehab flips to gain more cash to buy more rentals.

A good book that you might want to pick up concerning common landlord tax questions is "Every Landlord's Tax Deduction Guide" by Nolo.

Additionally, you may be entitled to take other deductions, including any costs associated with the transactional funds, etc.

Figuring I'd be able to deduct it all in one year as a repair, I thought 10K wasn't too bad since a little over 3K should end back up in my pocket.