He tried to get ahold of the foreclosure attorney to see exactly what had happened and has had a few back-and-forth e-mails with the company he purchased the note from but I keep telling him that he should ask the expertise of BiggerPockets what his next move should be :) (I've been lurking for months and hardly post but I've been reading and learning a LOT).More pointedly, at this point are there any specific questions he needs to make sure to ask?

Bob E.

@James E. 

I have several Rental Properties owned by my wife and I, we manage by ourselves, so we have positive Rental Income on Schedule E. but negative Income on Schedule C, can I put $3000 Property Management Fees as expense on Schedule E, and add this $3000 as Earned Income on Schedule C?

I fundamentally agree with you though! 

I just found it online this weekend, and I e-mailed the owner my contact information, so that we could set up some time to go through the property. 

In the case of multi-family, we have a separate PO box for correspondence, a separate phone #, business e-mail address, and business bank account, and the business card I pass out to the tenants say that I'm the manager, not the owner.  

Of course, the bank likes to see seasoned rents, but even if they are low, fundamentals [hollow tile, 1:1 parking, location] can sway them to overlook the cash flow and will bring cash buyers to the table.So here's the take-away: real estate investing in Hawaii is historically a sure thing.

I don't know your market at all, so I'm no expert on it but in general, these are the things I would be concerned with:Very small marketDeclining population (shrinking renter pool and not a sign of a thriving economyLow median household incomeHigh vacancy rate (if the number is accurateI can't see anything that says "wow, this is a great market to invest" The economic and demographic fundamentals look very week to me.

During tax returns time, I file a Schedule E for each property.