Now that doesnt mean I think every property will go up in value, nor would I buy something that was cash flow negative...but we should not ignore the simple economic forces of inflation, and supply and demand.  

You want your Cash Flow to remain the same.  

Certainly, the seller knows the wholesaler is in business and must make a profit to remain in business.

So you paid me $5k upfront, I will use the remaining $1k to pay people so we don't have to stop work while waiting on the funds.

My business mind tells me to utilize the remaining time as a vacation rental to try and help fund the upgrades/repairs we need to make.But before I can do that, I am looking for advice on how to manage this clunky ownership structure.1.

He sells the house to you, carries the note, your monthly payments go to pay down the mortgage he has remaining and some cash into his pocket.

The biggest problem I have had with most wholesalers in Texas, is they make up fictitious inflated ARV's and Estimated Repairs trying to make their deals work. 

Thus, John will pay capital gains tax on $200,000 of the gain and the remaining $200,000 will be excluded per IRC sec. 121.Note: for simplicity sake, this example does not take depreciation deductions into account, which is explained below.This is not legal advice.

Save up $12-20K (or less, depending on where you want to buy), buy a 2-3 bedroom using FHA, and rent out the remaining rooms.

With the passage of SB 206, all current protections remain in law and new protections are created for commercial property owners and tenants if the water provider does not provide the notice of outstanding debt within 10 business days if properly requested.