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

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.

The property you purchase will be a capital asset held as an investment and the income will be rental income which is not subject to self employment tax.

``This is a common-sense bill that eliminates the double whammy of someone losing their home to foreclosure and then facing an additional tax bill right when they're down on their knees anyway,'' said Representative Dennis Cardozo, a California Democrat who said he represents ``the foreclosure capital of the United States.''

There is an opportunity cost to having working capital tied up in a marginal performer.John Corey

So, recongize why you buy RE materials and then decide if there is a better way to apply the capital you have.

Biggest issue right now is understanding how to access capital and how to properly analyze properties.

Operating expenses include taxes, insurance, management, maintenance, utillities paid by the owner (including during vacancies), advertising, entity maintenance, legal fees, evictions, court costs, capital expenses (not technically an operating expense), damage done by tenants above the deposit, lawsuits, office supplies, etc, etc, etc.Mike