They might be purely wholesalers who are just trying to buy then immediately resell the house.

When it's all factored in, your numbers look like this:Cash on Cash pre-tax: 2477 (8.85%)Cash on Cash after-tax: 2248 (8.03%)Total ROI pre-tax: 3826 (13.67%)Total ROI after-tax: 3597 (12.85%)So in terms of pure cash in your pocket, 1 and 2b are a dead tie, with the long term ROI of 2b pushing things in that direction.

@j JohnsonMy motive for our vacation rental is purely for leisure than profit.We always wanted a lake home.

(This will change in the future)The problem is neighborhoods that i want to live in due to school and work proximity have houses that sell well above this figure.Should l continue to live in my apartment which i pay 460 a month for (share with a roommate) and then look at this venture purely as an investment?

First, I have no idea what prices in your area look like, what types of contractors you plan to use, how much of the work you plan to do yourself, what level of finishes you'd use, etc...so my comments below are purely speculation and generalization

The tax benefits were a pure surprise.

This will not work for declining markets or purely rental areas.

Political persuasions aside, this was pure greed, both conservatives and liberals should be fuming.

The reality is that there are pure takers out there and only fools perpetuate the the situation.

But, from a purely cash perspective, the risk of #2 is 80% less than the risk of #1.Debt is helping the investor incur less financial risk.Thoughts?