Hello, somewhat of a mentor, but I have many things he will be taking over like my employees, banking/attorney relationships, buyer relationships, marketing tactics, and the list goes on.

I have heard about court rulings that say that the tenant then becomes your employee and you have to have all the insurance and pay the taxes for them as an employer would.

. $90,000Tenant just signed a 2 year lease 10 minutes ago for $1,200/mo.Approx. 3% Gross Monthly ReturnI showed the before pictures to the tenant and she was speechless and couldn't believe it's the same house.

If someone is claiming 38% of gross rents for expenses on an older building I expect there to be a lot of patch jobs and deferred maintenance.

The 50% rule says you have to put 50% of the gross rents to expenses, capital and vacancy.

General financial info that has to be verified: Year 2013Scheduled Gross Income $66,840Operating Expenses $26,706Net Operating Income $40,764Pre-Tax Cash Flow $40,764

If you plan to be an employee til retirement, then you will need to find out what you are lacking.

And then do I become a w-2 earner or set myself up as self-employee?

They had good credit (both 760+) and gross over $2,600/mo.

Now from what I can tell from this forum, Nolo's book for landlord taxes and the IRS instructions for 1099-misc (which is actually not very helpful), the 1099 my PM sends me should show "gross" rents in Box 1 - not 'net' rent.