I didn't know all these rules.

And though I'm all for NOT filing any more paper work with IRS than necessary you can always follow the old rule "when in doubt, send it out." :) Although there are penalties for FAILING to file a required form, there is nothing that prevents you from filing a Form 1099 when it's not required...

Here are the numbers:Asking price: 120KUnits are 2/1's, rent for $600 eachBuilt in 1959Tenant pays heat and electricIncome: $600 x 4= 2400/month and 28.8K/ yearlyI used the 50% rule to cover expenses, but some of them would presumably be:Insurance: $115Taxes: $357Vacancy: $240 (10%)The property seems to some sense using the 2% rule (2400 a month rents is 2% of 120k).Financing: I plan to live in one of the units and use FHA financing.FHA down payment of 3.5%: 4200Loan of 115,800 at 3.5% interest= $520 monthly paymentAfter 50% Rule, $1200-$520 = 680/4 = $170 profit per unit/monthlyI have just a couple questions about the property.The owner recently bought it and replaced the windows/doors and claims that the building is in good shape. 1.

The basic rules are simple though enforcement is strict.

I wonder about these guidelines like the 50% rule, I don't see how that can apply equally to situations where landlords pay water/garbage/sewer and situations where they don't.

Tenants pay all utilities and taxes are 1833. 50% rule says NOI is 24,720.

This site rules!

Anything unethical or against the unspoken rules of investing with this strategy?

These are more questions determine if you would even benefit from depreciation due to the passive loss rules.

Know the market, how to value properties, what the rules are and financing issues....then go for it!