Add in property manager, repairs/maintenance, CapEx, vacancy etc and you will be deep in the red.

At the time of the leak, my tenant was showering, but everything around the bathroom is sealed and in good condition.It’s been a week now, and there have been no further leaks.However, the owner of the apartment below is still asking me to repair their ceiling.

Once you find a potential tenant, you have to go through a Housing Quality Standards (HQS) inspection, which can take a while and may require some repairs or tweaks to pass.

Apparently they handle all property repairs and maintenance independently and have maintained a perfect payment history, even throughout the pandemic.Lease Option Agreement:Effective Date: November 1, 2022Terms:Purchase Price: $165,000Non-Refundable Down Payment: $10,000Lease Term: 3 years (ends October 31, 2025)Final Payment: $158,000 balance due upon term completionMonthly Payment: $1,150 (no rent credits)I didn't see this to be a deal because if in a the best case scenario my $25000 would walk away with 2400 which is about a 9% ROI.

if you ever have a major repair, or an eviction, or a major turnover, you may need to be a little more 'active.'

I did a lot of repairs myself but also hired a few skilled contractors for things like electrical work and plumbing.

@Richard NguyenHere are some of the downsides of putting real estate into a self directed IRA or 401k.No tax deductions: You can’t claim deductions for property taxes, mortgage interest, depreciation, repairs, improvements and other property-related expenses.Property expenses: All expenses, repairs, and maintenance costs must be paid with IRA or 401k funds, and you must pay others to do repairs and manage the property.

There might be Some exceptions such as you did a bunch of repairs/improvements which increased the value of your home .

This is because they didn’t budget properly and rent wasn’t high enough to cover actual expenses (repairs and maintenance, cap ex, vacancy and loss, tenant damage and turnovers, etc don’t expect to have any money left over after all of these expenses are accounted for if the rent is less than $1,500/month). 

My view is probably a fallacy as I have not factored in closing costs, home repairs, and the down payment into the equation.