Your initial post was unclear whether the water bill was $2k/month or if the balance was $2k because they weren't paying you for it.

Hi,People always talk about how they purchase a rental property, wait a few years for it to appreciate, do a cashout refi to recoup their initial down payment, then whatever they earn in the future is infinite return.But in reality, how is this truly a "recouping of initial investment" when you have to pay a 4.5% interest to take out the cashout proceeds (with $3000-4000 of closing costs on top)?

It’s the initial loan that’s more the issue.

By year 5, I will have a 100% overall return on my initial investment of only $24k!

It's been ~6 months since the mayor did the initial sweep.

Initially, I was hesitant about buying property due to the potential expenses, but I realized that approaching real estate as an investment could yield the financial freedom I’ve always aimed for.The Start of My JourneyIn December 2023, I decided to devote my spare time to real estate.

The owner had no clue and didn’t initial the “liquidated damages” clause.

The initial bundle fee that was in place for about two years was reasonable. 

It reduces risk by lowering your leverage, and once one property is paid off, that cash flow can then help pay down others even quicker.A balanced approach might be to focus on acquiring a couple of properties initially while keeping some reserves, and then reassess based on how things are going.

ok, in your initial post you stated you got your money back -but it appears you did not get your money back.