Sharad it depends on the bank itself and what their books look like.In a depressed area already it doesn't make sense to do repairs as the property will be vandalized yet again and the bank will throwing money down and endless hole.If you have say one or two foreclosures on a street in a nice area then yes a bank might do repairs to sell to an owner occupant at a higher price.Depending on the age of the home you can't do just carpet and paint.The bank would need to replace all outdated fixtures,countertops,change layout problems,etc. to get full price.Paint and carpet will not get them close to full value as a buyer coming in will want everything done.It's like a flipped house that has been half way done.The buyer will deduct all the improvements they will have to make for it to work for them in the offer price.There are some banks letting the former homeowners rent in the property.It keeps the property occupied which gets rid of banks dumping for cheap.The bank hopes when they do sell in a few years the market has recovered.

Right now I just have Quicken files for the properties, a corporate kit for the one LLC, and Excel spreadsheets where I input the information from my deductible receipts.

While you'll pay a slightly higher interest rate for an investment property, there are tax advantages - being able to claim depreciation for the house itself and any capital improvements, as well as being able to deduct running costs - all repairs, property tax, insurance, etc, as well as mortgage interest, which is deductible in both scenarios.There are still some complications in my mind to buying it as an investment property and being her landlord.

If I buy the house and then pay off the taxes can I deduct everything?

If you deduct their holding costs for the property even if there's no mortgage (probably common with probate) they're probably going to net 79% of their asking price, WOW.

Most lenders will want two years returns, but if you search around you may find one that's more flexible.I strongly recommend a CPA to help you maximize your deductions and to be sure you're filing correctly with your complex (partial rental/partial residence) situation.

The other big downside to switching is that the deductible onthe new plan is 3k and thats as low as they'll go.

When they call for small things like toilet seats, even window screen repair, I have the option of telling them to send the receipt for the parts if I trust them to handle it and deduct it from the next rent.

It's tax deductible if you set it up right..........There you will learn unprecedented knowledge to do deals for wholesaling as well as learn what did an did not work to close deals.You can meet possible money partners on hot deals you findetc.Say you spend the thousand on mailings and get a bunch of calls- what then??

And your point about the deduction brings it across the line of definitely living for free.