Look around the site and get involved.

Let me explain how this hurts everyone involved.

I've been able to do investment property with 5% down stated income loans although I believe my initial deal with that person involved a 1031 exchange with a significant down payment.

There's a lot of traps involved in flipping properties some of them can get you in legal trouble.

no good.i've never been involved in a lease option transaction, but i know this much:the transaction must be "recorded" - i guess that means at the county offices and/or definitely notarized.a deed is drawn up that states the sale of the property will take place on X and is contingent on blah blah blah [the buyer fulfilling the lease requirements].if they don't, they lose their consideration (money down).

You sound way too emotional and involved in they misery.

If you had this property, then even though you really had cash flow, due to depreciation you still have a loss for tax reasons in the eyes of the IRS.In this example, you have a $-6,864.82 Taxable LossThat means with this property, now your taxable income is $93,135.18 and what you pay in taxes taxes is$93,135.18 * .30 (30%) = $27,940.554 That's $2,059.446 lower total tax bill than you had without the property.

Cash is king.In commercial real estate the transactions involve larger dollar amounts than most residential properties.

However my return would be about 4%and that is a hobby and not an investment in my eyes.

I'm glad you signed up and are getting involved here!