That's pretty hazardous... and expensive.At the risk of offering unsolicited advice, I imagine that you might make more private money loans in the future, so allow me to suggest that you use a land contract going forward.

But it was private stuff. 

Outside of real estate, my career has spanned management consulting, private equity, corporate finance and marketing strategy.  

in 2014 the property was sold for 165k but the previous home owners just abandoned the place and left the private mortgage holder with the expenses.

If you had to borrow private money, you would probably pay a minimum 8% or more.

Second decide on residential or commercial real estate or related business like note buying or private investing. 

Is there long term Private money out there?

They're A rated housing tract in a good school system is a D to the guy living in the ocean front home with kids in private school.

I hope I am asking the correct question:If I am purchasing and improving a flip with the following scenario, how would the interest being deducted in terms of when I capitalize on the property? Or am thinking through ...

There are a lot of options with investments here in Kansas City in real estate from doing it all yourself to becoming the private lender for other experienced investors.Dig in and learn, do your research.Were you looking for more hands on investing or more return on your investment?