I could probably get 100 more on each though.Purchase Price: 320,000Monthly Income: 2,750Monthly Expenses: 2,272Monthly Cashflow: 477.15NOI: 20,040.00Total Cash Needed: 71,000Cash on Cash ROI: 8.06%Purchase Cap Rate: 6.26%Other Information:Closing Cost: $3,000Estimated Repairs: $4,000 (I Just put this randomly, it was recently renovated)Down payment: 64,000 (20%)Amortized: 30 YearsLoan Interest Rate: 3.80%Monthly P&I: 1,192.00Total Operating Expenses: $1,080.00Mortgage Expenses: $1,192.85Also using 50% rule it says my cash flow will be 182.00 per month.Not sure if you guys need any more information, I am hoping this is enough info to share to see if it is a good deal or not or if the numbers make sense.

His operation was eventually shut down by the county which resulted in him selling the hotel to the current owner.

The schedule E is for expenses related to the annual operation of the specific property such as repairs/maintenance, etc...I am a licensed real estate agent and I file a Schedule C for that "business" with my associated 1099 from my broker.

Ethically is it wrong of me to feel like if they can't follow through with the option, that's actually in my interest?

Companies that INVEST have other business functions that are the primary source of income, when the primary incomer becomes through note operations you're a BROKERAGE!

MUCHO - it’s a SCAM - Legal yes Ethical NO!!!

That'd make it easier as far as deciding which state to open the LLC in.If you open the LLC for say Nevada, but do business (own properties) in California, you'll have to pay foreign entity fees/tax...and that's pointless.Next, you need a very good operating agreement for your LLC.

Conventional lenders want to see operating data that supports the loan. 

We are local operators and we've gone through a few property management companies.  

Where would you look to find a reputable and ethical private lender for buy and hold properties.