A&B form a partnership with A being the limited partner (LP)who will invest $150,000 and B being the general partner (GP). The group finds a property for $700,000 and takes a mortgage for $550,000, interest only at 6%. They agree to a 90/10 split on the profits and distributions while the property is owned by the group.

Assume the following:

Gross Income- $125,000

LESS VACANCY- $6,250

LESS OPERATING EXPENSES - $27,000

Assume straight line 10 year depreciation schedule ($70,000 per year)

What is the capital account of investor B (the GP)

		$7,000
		$-7,000
		$5,875
		-$5,875