This was also in rural NY not Chicago so your mileage may vary@Brie Schmidt brings up an interesting point about the zoning may now be single family, if that's the case do you want to forever and totally make it a SFR?

Cash out of pocket $15,000, Purchase price $89,000, rehab $23,000, ARV $135,000, capital gain $12,000, 80% return on capital gains, monthly cash flow $463, 37% cash on cash return, total return for year 1 without appreciation: 125%.

The safe harbor applies to amounts paid during the tax year to acquire or produce what the regs call a “unit of property” (UOP), you must meet these requirements: (1) at the beginning of the tax year, the taxpayer has written accounting procedures treating as an expense for non-tax purposes amounts paid for property costing less than a specified dollar amount (which will be 2500 for you), or with an economic useful life of 12 months or less;.(2) the taxpayer treats the amount paid for the property as an expense on its books and records in accordance with its accounting procedures. ( do this on your bookkeeping software or whatever you utilize)(3) the amount paid for the UOP doesn't exceed $2,500. as substantiated by invoice.Note: The cost for the Unit of Property includes additional costs (for example, delivery fees, installation services, or similar costs) if these additional costs are included on the same invoice with the tangible property.Eg:A purchases 100 printers at $500 each for a total cost of $500,000 as indicated by the invoice.

As I understand it, a landlord is required to keep tenants' security deposits in a separate escrow account.  

Make sure the seller transfers the security deposit to you at closing. 

Hello all, I currently own 3 townhomes on a street with a total of 12 townhomes.

There is also more security with a multi family as you can have a vacancy and still be positive.

So $2100 total.

Will I essentially be taxed on the sale of Property #1 ($375k - $280k  totaling $95k profit) regardless of the $56k (showing as equity in Property #1) being from another loan? 

Some people can't sleep if their money is at risk in securities.