A good rule of thumb is to always save 10% of your gross income, then make due with the rest.

Now if I have the business documented as 99% ownership as a limited partner and my colleague as the 1% General Partner, does this really mean she will receive 1% of the gross proceeds as ordinary income subjective to SE tax, and the remaining 99% passed through to me as JUST Ordinary income??

Your cash flow (after capital reserving and vacancy allowance) will be squeezed too much, I don't care how high your gross rent yields are.

My gross income is a lot higher than my net income.

A park that looks good pops up, and then something is wrong with it... just done email on one where the everything lines up- right until the seller is applying the CAP tot he Gross Income... and my last contact with the Broker was- he was thinking of raising the price.

Here is how the numbers look:POTENTIAL RENTAL INCOME$14,400 Total Potential Income if rented 100%Less: Vacancy$(450)Assumed 2% Vacancy FactorEFFECTIVE RENTAL INCOME $13,950 GROSS OPERATING INCOME $13,950 Total RevenueOPERATING EXPENSESReal Estate Taxes $2,500 Property TaxesProperty Insurance $700 Repairs and Maintenance $500 Utilities $150 Lawn and Grounds Keeping $300 Miscellaneous $300 TOTAL OPERATING EXPENSES $4,550 Sum of Line 6 thru 23NET OPERATING INCOME$9,400 Less: Annual Debt Service $(2,864)Total Mortgage PaymentsCASH FLOW BEFORE TAXES $6,536 Add Back: Principal Payments $864 Principal Paid on Loan- Depreciation $(3,818)Tax Depreciation on BuildingTAXABLE NET INCOME (LOSS) $3,582

$2,640 monthly gross income x 12 = $31.680 yearly - 50% expenses ($15.840) = $15.840 NOI calculated, so a 10% CAP = $158,400.Expenses include 10% vacancy, its the best you calculate not so optimistic.

Even if you were to have them issued a 1099 for their share it would be the GROSS share not the actual amount of profit.I say protect everyone and do the partnership return.

That simple says that over the long term for a portfolio of properties, vacancy, capital and expenses will eat 50% of the gross scheduled market rent.

I am looking for something on the buy side in the neighborhood of 60 - 65% of the gross.