Also, cash talks so look into a hard money or private short term investor so you can secure the deal and then structure it later the way you see fit!

Buying something and renting out rooms etc. is totally fine.

We get $2300/mo for the 2 bedroom rental bringing our total cost to list there to under $2000.

So the total cost of everything was $44k.

@Melissa R.You might need to do a combination of going through insurance and taking part of it out of their security deposit.It might be a tough call if it was just a mechanical thing in the tank, versus someone intentionally clogging the bowl.

Anything less than $875k (less selling/closing costs) becomes “boot” and is taxable up to your total cap gains and depreciation recapture.To avoid tax, 2 rules.1) replacement property price must equal/exceed the sold property2) you must reinvest All the cash proceeds from the sale

That got us through all the basic rebuild until we secured a 750K loan to finish. 

The intent of this method is to use the funds to quickly secure the property and then pay off the HELOC to take an equity position and reduce your overall risk.

I secure the 20% needed from a private lender; how does the private lender get his return? 

I have tenants that are landscapers (total of about 10 of my tenants), handymen, truck drivers, tow truck driver, install flooring (2), etc.