All businesses have losses and landlording is no different.2.

[Note: There is a caveat here: if the corporation employs 5 or more full-time positions, then the income would be classified as "active" and would be taxed accordingly].When rental property is held by an individual, the net passive income (or loss) is added to that individuals other income and taxed at the corresponding marginal tax rate.

There is very little you can't get actual numbers on when calculating profit (or loss) on a rental property.

There is a provision in the contract, that if we decide to SELL the property after the plans are approved, but before we start construction, that I will be compensated 5% PER ANNUM on the money that I invested, AND we will split the remaining PROFIT / LOSS - 50/50. 10.

These all have grey areas as to the amount of loss of time or money.Contracting with these aspects will generally drive the cost up too, the more you require the more they may charge.

And since the borrower has no skin in the game - who ends up eating up these losses - me, the private lender.Bottomline: there's too much risk.

If not, then chalk this up as a learning experience as it will be a loss.    

Hey its their loss I am a wholesaler and would cater to my buyers as much as possible.

If you can't sell to recover your losses, you might be out, other states you obtain a deficiency judgment and hope you collect from that.

They can all work at different times, imo.Good luck finding your own method.Rich Awesome insight Rich,This is the same track I've been researching, thanks for the post to reiterate that there are others other there  on this same path:- the balance between cash flow, tax shield from depreciation, and projections to figure out how to net "0," on paper or as close to it as possible- building up the passive activity loss bucket in anticipation of properties or other income producing activities that have income that exceed expenses and depreciation so I can keep the net "0," balance for tax shield purposes- use of entities, revocable and non revocable trusts, and Life insurance to exit life with no estate tax, fund trusts with perpetual income and asset growth by auto/default design to perpetuate indefinitely into future generations