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.

The only way to gain that knowledge, is through years of hands on experience.

Now, if you are passively investing and someone else is managing then an hour away is much less of a concern.

That's considered a passive investment, and some of the structures only work for "operating companies."

and i don't regret it at all. sure it's nice to have made a great profit on my first transaction but i viewed the situation as:1) i can continue to rent...2) ...or own a property paying the same amount of rent and expenses while gaining experience.in both instances my cash flow (i'm going to include the income from my job) would have stayed relatively the same---granted i pay about 200 more due to taxes and insurance. but 200 extra a month was not as important to me as it might be for some one else who has a tighter budget. but since i made the leap definitely feel more confident navigating the entire process over again and also learned how to do some rehabbing on my own (tiling, staining, flooring, light plumbing..etc...)I also now have realistic timelines as to when certain jobs can be completed----at one time i thought I could gut and fix my kitchen and two bathrooms by myself in under 2 weeks only working weekends.

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.

You might not be able to gain access and the utilities might be turned off.

It should be expected that there are things to learn and that you need to get out there to gain experience.

If I lease purchase a home and pay a lease payment for 2 years and then find a buyer to buy it, do I still get to write off the whole capital gain amount even though I only owned it for an hour if its a double close?

So my question is, if you were in the same shoes would you attempt to sell the house at the end of 2008 to avoid paying capital gains tax or would you keep renting.