Never count your commissions until they are deposited into your account!

Plus, you'll want to create an upfront operating account of 1% to 5% of the purchase price to cover unexpected expenses before you've accumulated enough money for the $250 to $300 savings.For SFRs or smaller multifamily, as you said, it depends.

Property Taxes Homeowner's Insurance$0a monthSee Escrow Account on page 4 for details.

Should I let the bank know that is where I plan on obtaining funds for my down payment or should I go ahead and pull out the amount and put in my bank account before applying for financing ?

I am a 20 year old aspiring real estate investor and I am currently a sophomore in college studying accounting.

@Courtney M.Lot's of great suggestions on the forum:Seller carry/finance: Seller may benefit from deferral of gainsHELOC: if for investment, tax-deductible even post reform401(k)Loan: up to the lesser of: (a) 50k and (b) 50% of account value.

Account Closed, and Geetika Casmon.

Partnership operating agreements are very flexible.You could do a waterfall schedule for both allocation of income and capital distributions.e.g.1) You're allocated a cumulative fixed annual return on your unrecovered capital contribution (6%, 8%, 10%, you name it)2) Profit in excess of the fixed annual percentage return is split 50/50.Capital distributions could be something like: first distributions are to recover your capital contribution(s), then preferred return accrued to you, and finally the 50/50 profits.Food for thought. 

Assuming that you're accounting for ALL expenses including vacancy, maintenance, CapEx, insurance, etc., then that is still a low return from the cash flow side of things. 

This would save you a ton with taxes - although it is in your best interest to speak with an accountant who can run the numbers for the different scenarios.