But according to Scorp IRS rules distributions need to be split up according to capital contribution (shares) in the business (75%/25%).In your example if the majority partner wanted to keep his 50/50 ordinary income to distribution split, the minority partner would be forced to take 41.67K salary 8.33K distribution.

(I also hope I'm not violating any rules here by posting this, if I am, I'll remove it)

There is a lot you will need to know about the property to determine if it is a good deal for you or not though to include:- rent history - vacancy rate- current lease terms- expenses (operating expenses, insurance, taxes, etc) - market value of the property- property conditionOnce you know more you can apply the 50% rule to determine what the long term expenses will be.

I'm still new at investing, but when people focus so much on appreciation I can't help but think back to 2008 with the bubble.For me, I'd do a typical analysis w/ the 50% rule and look for a property that cash flows at least $100 a month.

A good rule-of-thumb is the 50% rule: Expenses (NOT including the P&I payment) will take up half the gross rent.Gross Rent: 395 x 4 = 158050% Rule: 1580 / 2 = 790P&I: (You'll have to add this in)Cash Flow: Whatever is left after the P&I payment.

I'm thinking by the 2% 'rule' if I can rent it for $400 a month, it would be a decent deal if I could convert it for under $20K.

Here's an exception to the rule, at least inside.

Read the sticky thread in the landlording forum about the 50% rule.

(I plan on buying units and selling or lease/optioning units).I've heard that you can look to local lower end apartments and subtract 20% but that seems like a rule of thumb at best.

I was wondering if anyone had heard the rule of not spending over half of ones' savings on anything if you have no debt.