If I call my roofer and tell him I have a roof leak in one of my rentals and send him out to fix it, he's going to fix it and bill me.

Good news is they add in any paperlosses like depreciation and any 1 time expenses such as a new roof, new kitchen, etc you can prove with organized receipts.Schedule E Calculation:Non-Subject Property:AddLine 3Line 12Line 18MinusLine 20Divide by 12 - mortgage payment = net incomeSubject Property:AddLine 3Line 9Line 12Line 16Line 18MinusLine 20Divide by 12 - PITI = net incomeIf you've had the property on 2 years of returns and the income is increasing they will average the 2 years if the income is decreasing they will use the most recent.

Now that FEMAs jacking up their rates through the roof private insurance can step in and offer rates that now look good in comparison.

Parts of Texas get some pretty fierce hail storms that wreak havoc on roofs.

I wouldn't mind buying this property for $40k, putting even $60k into it, then having it as a long term rental since all of the plumbing, roof, mechanicals, electric would be new- the ongoing maintenance costs would be lower than other properties priced similarly.

For properties on your tax return they will take the net income from your schedule E and add back in depreciation and 1-time expenses (roof, kichen, frence, etc) you can count on this information to be 100% until January 10th, 2014 when qualified mortgage rules kick in.

All new foundation, all new plumbing, all new electrical, new furnace, new water heater, new siding, new roof, new garage door, new drywall (house was torn down to the studs and rebuilt when moved).

During the Conversation with Adam you discovered he is underwater, going through a divorce (going to need his spouses signature), and NO Equity.

If the inspection finds that a new roof is needed now I take that off the purchase price numbers.

What it two of you want to buy a new roof and the third does not?