You owe two taxes:A. capital gain tax on $150k ($500k sale - $350k purchase)  PLUSB. depreciation recapture on $100k of depreciation taken.Now, let's assume that you messed up somewhere along the way, and you only took $70k worth of depreciation instead of $100k.

For those, each has its own LLC because I need to segregate investors in different properties (in other words, the ownership is different so the entity has to be different) and because our lenders for those size deals require single purpose entities.But if I formed a separate LLC for each of the 700+ properties that I’ve purchased in my career (all of the houses and small multi), I’d need a full-time legal team just to handle entity administration.  

Purchase price: $265,000 Cash invested: $200,000 1930’s historic home with a converted garage.

So if you purchased one 4-plex each year, after 10 years you would have about $12K per month in cash flow.

Purchase price: $225,000 Cash invested: $40,000 Sale price: $375,000 Bought a large 4 bedroom pool home and flipped

Fantastic to hear that you were able to navigate the challenging purchase.

One year after I used that property to pull a HELOC and this year used that money to purchase an off market 4 family property in Clinton for well under market value, which I just recently finished all of the repairs and upgrades on.

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

You are definitely going to want to get a lawyer and as soon as possible.This will sound harsh.In your story, you have made a number of very poor decisions about how you purchased and managed this property. 

For an $800k investment purchase, I would expect $200k downpayment, $10k-$15k in closing costs, and 1-3 points at $6k/point.