I don't really need to know much else about someone - if they can't pass this test, why should I believe that they will be able to run a business that will generate cash?

Congratulationswhat you’ve found that both the INVESTMENT side of real estate, and theBUSINESS side are very competitive; therefore profit margins are compressed, so those “home runs” people like to bragg about are actually quite rare.  

The borrower gets the benefit of having access to capital fast and the lender gets the benefit of charging a higher interest rate and not having to pay taxes on the profit.

The $10,000 yearly maintenance fee is really hurting your cash flow, as it’s eating up all your profits.

Make it a habit—underwrite one deal a day until you get the hang of it.The tougher part, and I think what you’re really asking, is how to turn solid underwriting into a profitable deal.

Selling and exploring a 1031 exchange could make sense if you can find a deal with stronger cash flow or faster equity growth, but the key is comparing your current return to what your skill and experience could generate in another investment.Here to help,Jorge

With a 7% interest rate and high HOA fees, the key is evaluating if your skills and investments can generate higher returns elsewhere.

Since then it’s generated top dollar and I’ve maybe had to put a total of $500 into it.

The report is as good as the answers you provide to their questions.The risk is that you answer a question incorrectly which generates an incorrect report.I would have a discussion with your CPA to determine what the land basis is(required to start the cost segregation).I would also have your home inspection / appraisal on hand to answer the questions more thoroughly. 

@Jay Hinrichs exactly the risk is even more than traditional development and the profit is actually less with more operational headaches.