Overall, it's been pretty profitable. 

Following the shiny object, throwing money at a market you don't know well, and blindly trusting strangers that have a clear profit motive put you in a poor position to succeed regardless of where you choose to invest.

He sold that duplex last year, and cleared a 6 figure PROFIT. 

The Importance of Honesty and Ethics in Private Money LendingAs a private money broker, I am in business to earn a living, but profit should never come at the expense of honesty and integrity.

Let's see: You sell one property, and to avoid paying cap gains tax, you then reinvest those profits within 45 days into a larger "like kind" property.

In general, any time you have profit or depreciation recapture that would cause a tax. 

If you do buy a pre foreclosure and follow all the rules and sell within 36 months any profit 80% has to go back to the original owner  who was in foreclosure.Since I made living doing foreclosure rescue prior to this . the new laws removed that activity from my business..

Having fewer but better properties will be more profitable in the long run.

Likely not allowed in the lease and if the landlord were to allow it they will partner with you and take a good chunk of the profits.

When you add rehab costs and effort, holding costs, and selling cost there is not much profit.