So you're only taxed on whatever cash you have left over after you've paid the mortgage, taxes, insurance, water bill, lawn care, snow removal, rodent removal, plumbing bill, etc.... kind of.Here's the deal - you pass through LLC earnings to your personal return.

Three more new appliances soon, roof, paint, flooring, plumbing, etc.

@Anwar Shabazz yes but like plumbing you would even want to break that down between like rough in phase and fixture phase.

Also make sure if it was newly renovated they didn't lipstick the property with carpet,paint, replace door knobs etc.You want big items like heating,a/c, roof, plumbing, electrical,etc. to have a lot of life left on them.If you buy based on inflated rents and then have flat to depressed rent in coming years, higher turnover and make ready costs, and high capital costs for large ticket items you could lose a bunch of money.Make sure the property insurance policy is not a master one insuring multiple properties as the owners policy could be low in cost compared to what you will pay.

Because they will and at some point one of them will need a major item like furnace, plumbing, etc...

I have family in Kansas City/Leavenworth, Memphis, and South Bend/Elkhart, so these areas would interest me the most, but I'm really open to anything right now (Des Moines and surrounding cities like Ames and Iowa City come to mind).I've never flipped a home, but I've built two custom homes (that were my primary residences) with a GC and have performed most construction/finishing tasks (e.g. framing, HVAC, electrical, plumbing, trimming, painting, etc) on my basements.

One of my friends had a plumbing problem at the same time I did. 

Good afternoon everyone,My dilemma: Contemplating Purchasing first 2-family home. 3br lower 2br upper Pros: - Location, in the heart of town- Tenant paying $1500 for 3br and wants to stay (been there four years)- Water heaters, Furnaces newer with separate meters for each unit- Natural Gas - 2 Car garage - Corner Lot- .24 acres- Based in rentometer.com 3br rent for $1700 on average and 2br $1550 on average for its location- 3BR has one and half baths- Laundry hookups both units - FHA Loan, less down payment- Owner occupied (id live on the top floor while renovating)- Foundation is solidCons:- 2BR needs a complete renovation to the studs- 3BR needs renovation but nothing right away (tenant is happy as of now)- Leak from fireplace/roof which is ongoing- Taxes are $4500- Price listed at 360k- Comps have sold around 330k, but don't have the garage or location- No cash flow until I were to be done renovating and buy another- Some plumbing neededI got a CAP Rate at around 8.5% with it being sold at 360.

When we performed our due diligence on the property we knew we were going to do something with it and that "something" would include the tenant paying their water bill.These units were taken down to their studs and all insulation electrical and plumbing was replaced.When the piping was replaced we used that opportunity to install a sub-meter water meter.

Distress could be structural issues, code violations, issues with major electrical or plumbing systems, major roof issues, etc.