Telling me that it's a poor rental is clear, but I guess I was trying to see if taking a partner to front the capital and then rehabbing would be best, or if my first impression to assign it with a 10k bump in price is the thing to do, or to lease option might be feasible, or something else...I suppose it's harder to evaluate a home that is in such a different market; this neighborhood is so close to lots of change in downtown, and one of this week's top local stories is the discussion of the new NBA arena to be built just blocks away.

Build some more capital then buy another investment.

If I had been willing to do this with my own capital and I could have taken lower returns, I could have done it.

I figured I would buy it for below market value, do most of my own repairs, and then sell after 2 years so i don't have to pay capital gains tax.

Operating expenses include taxes, insurance, management, maintenance, vacancy expenses, advertising, utilities paid by the owner (at least during vacancies, rehab, etc), evictions, court costs, entity maintenance, legal fees, common area upkeep, lawn care, snow removal, office supplies, damage done by the tenants (in excess of the deposit), lawsuits, capital expenses (although not technically an operating expense), etc, etc, etc.

I am working on getting a loan for 80% and the remainder is coming from the capital I've invested in the the LLC and the other 8-12% or so is going to come from a HELOC we got on our primary.As for the credit rating of the LLC, by getting the loan in the LLC's name will that begin to establish a credit score for the business?

Out of town owners get priority when they are in town, and we try to meet at our office to review financials etc; then depending on circumstance I like to walk the property with them, and discuss long term strategies and capital improvements planned or in progress.

I now understand the meaning of paying several thousand dollars for a loan and associated fees vs. trying to save that capital and being in a position not favorable when considering the IRS.

You don't want to refi and cash out, because then you could get into it being reclassified as a sale by the IRS and then §707(b)(2) will be triggered and the gains will be treated as ordinary instead of capital and that will cost you 15-20% in taxes.Originally posted by "REI":You are still legally liable for the loan.

in your view what is the best way to get into RE with not a lot of capital