In theory this gives me the deepest conversation first with the seller on the rehab costs, permit issues, major items etc, to be in a position to negotiate an appropriate price.Down sides is....I would spend a lot of time and money on inspections on homes that may not close and my realtor is writing lots of contracts.Up side...I get first right of refusal and a strategic advantage in a competitive market.Is this approach legal? 

Disclosed in writing to the sellers upfront.

When you see a home that looks pretty nice - not a perfect home (you'll be stuck forever if youre looking for perfect) - then tell your agent to write an offer.

His rationale is that when he's looking at my tax returns he's looking at my write offs, such as depreciation, repairs/ renovation, mortgage interest, and concluding that since I'm writing off "x" amount, that I'm actually negative cash flow.

Thank you for confirming I have been treating them correctly.I write a couple per year and have been declaring the Option Consideration in the year the Option is exercised or terminates/expires.   

It is great you are reading David's book, because there is much more too it than what I can write in a quick response.

Deposit every penny into one bank account going forward. this leaves you the option of doing a bank statement loan for income if you write off expenses against commission. 

Brandon is talking about the formulas... he says NOI / Property Value = Cap Rate (which is absolutely correct)… and then he says it can be rewritten as….Property Value = NOI / Cap Rate (which also appears to be correct) But then he says you can also write it asNOI = Cape Rate / Property value … which doesn’t make sense to me.. shouldn’t it be..NOI = Cap Rate x Property Value instead??

Write it up in your contract.

It is in writing, on file at either the courthouse or city hall, and probably available online.