What gets brushed under the rug in the 50% rule discussions is the collection loss and economic vacancy when people purchase properties that cash flow with low amounts of dollars invested.

-Steven the Tax GuyYour guide to IRS laws, rules and regulations

(by the way, it's a 2 unit, and even breaking down the numbers bit by bit, it still ends up at 49% expense as % of gross income, so it holds up to the 50% rule)

Based on the 50% rule, I went with $450 / $5,400 yr cash flow.

Rule #1 in negotiating, don't offer a number first.

Dont know your area or property,,,just wondered what it would 'take' to make the fourth unit 'legal'?

Fannie Mae, page 82 of their latest 10-Q says "...foreclosure levels were lower than what they otherwise would have been during the first nine months of 2011 due to delays in the processing of foreclosures caused by continuing foreclosure process issues encountered by our servicers, changes in state foreclosure laws, and new court rules and proceedings.

I listed on MLS through entry onlyBuyer came in with agentBuyer had no written contract with agentAgent submitted formal offer to purchaseI refused---It was too lowBuyer came in with other agent and submitted a higher offerI acceptedFirst agent now says that according to MLS rules I owe first agent the commission because that agent procured the buyer and was in middle of negotiationSecond agent says that buyer was not satisfied with performance of first agentAgain, first agent had no written contract with buyerIs first agent due a commission??

-Steven the Tax GuyYour guide to IRS laws, rules and regulations.

My guy is that, if you're unclear on some of these basic rules, you're probably not be overly aggressive in your tax savings -- a good tax guy *will* save you more than he costs you.