You owe two taxes:A. capital gain tax on $150k ($500k sale - $350k purchase)  PLUSB. depreciation recapture on $100k of depreciation taken.Now, let's assume that you messed up somewhere along the way, and you only took $70k worth of depreciation instead of $100k.

That means an 800K purchase and a 200K rehab (1 million invested) can result in a 400K tax credit that results in 360K CASH back in the pocket of the investor.  

There are really great REI opportunities in different markets - markets in the Midwest and Southeast of the country are particularly lucrative - where not only are the purchase prices reasonable for most RE investors, but the homes are turnkey (new builds or completely rehabbed homes, tenant ready, systems 10 years of life remaining on them, property management teams in place) with appreciating home value AND appreciating rent.

Purchase price: $240,000 Cash invested: $39,000 Sale price: $342,000 Held property for 3 years and rented out the property for 2 years with a rental profit total of $22100 How did you finance this deal?

Make sure you understand exactly what they want to see and when, all through the build process.

@Omar Fernandez for my NYC purchases I use 978-767-3757 (Berto). 

.- **Scaling Can Be Tricky:** FHA loans are typically for primary residences, meaning you’ll need to strategize if you plan to purchase additional properties.Thinking through financing options and backup plans before you buy is essential.### 5.

Purchase price: $232,500 Cash invested: $45,000 Beautiful fully renovated Shore Acres 2/1.This house really stands out on the block with the new bright paint scheme!

One year after I used that property to pull a HELOC and this year used that money to purchase an off market 4 family property in Clinton for well under market value, which I just recently finished all of the repairs and upgrades on.

Hi Yinon, Most DSCR lenders will not typically require you to have a lease in place if the property was recently renovated or purchased.