The other half of the note-investor lifecycle: a rental you've held gets sold to a buyer on terms, and the note you'll collect on is created carrying your landlord history. On the rental property's Overview tab, click "Sell with seller financing."
The guided flow
- Enter the sale — sale price (seeds the note's principal), the date you originally acquired the property (holding period), your capital improvements (pre-filled from the property's CAPEX/improvement expense rows), and the depreciation taken while you held it. Ask your CPA — depreciation recapture applies on sale.
- Optionally end the active tenancy — the standard audited end-tenancy step; the unit goes vacant.
- Create the note — you land in the regular loan wizard, prefilled: direction Asset, the property linked, and the sale price as principal. Adjust the terms (a down payment reduces what you finance) and create it like any other loan.
What gets seeded on the note
After creation, the note's Tax Tracking worksheet is seeded automatically:
- Strategy: rental, then financed.
- Date of purchase: when you originally acquired the property.
- Capital improvements: the capitalized spend you confirmed.
- Depreciation taken: the figure you entered.
The Form-6252 figures — gross profit %, contract price, per-year gain from principal actually collected — are computed by the same installment-sale engine as every other note. The seed only fills the acquisition inputs.
The rental afterward
The property stays a rental until you turn that off (a tenancy may outlast the closing). Once the last tenancy ends, untick "rental" from the property view.
Took the property back through foreclosure first? That's the mirror-image step — see Convert foreclosed collateral to a rental.