Specifically, I’m interested in understanding the costs, potential returns, risks, and strategies involved in transforming raw land into a residential neighborhood.  

It’s a higher barrier of entry investment with much higher returns (and tax incentives).  

The 10 year return on expensive markets like CA, Seattle, Boston, etc. obliterate those of cheap midwest markets.

Separate LLCs and bank accounts are needed for asset protection, bookkeeping and tax return preparation. 

A second option is getting a DSCR loan.Lastly, knowingly leaving deductions off of your tax return to qualify for a loan is mortgage fraud. 

I also own a short-term rental management company that partners with other real estate investors and second home owners to 2-5x their returns while also taking the headaches out of operating STR’s.

This means that you will probably need to pay registration and filing fees in at least 2 states if you don’t buy CA property as a CA resident.Be sure to tell your accountant that you may now need to file non-resident income tax returns in each state where you own property as well.

Quote from @Hector Espinosa: Hi All,I would like to hear your comments about the following property, which I think, based on the analysis I made, seems to a be a potential good investment:* Purchase Price: $98,000* Monthly Cash Flow: $310* Annual Cash Flow: $3731* CoC ROI: 15.86%* 5-year annualized return: 15.35% (with a profit if sold of $25K)Also, what are some of the disadvantages of buying old houses? 

Acquired 1-bedroom rental property, generating 30%+ cash-on-cash return.

Once you see how much it cash flows, you can divide by your total cash investment to find the cash on cash return, then make assumptions about appreciation and mortgage paydown to find your total return.