Lets say you end up with a yearly profit of 5k. 

Unfortunately, you will pay a high price to keep it while waiting for appreciation and it may not pay off in the end.If you want to invest for profit, you need to learn how to analyze property.

Reason being, you can pay taxes on the smaller seed so you never pay taxes again on profits or distributions during your retirement. 

Go work for a person or company closing profitable real estate transactions and get paid a salary. 

By doing this 1031 exchange they will indefinitely defer paying the tax on the profits. 

Local Regulations: How do local landlord-tenant laws, rent control policies, or other regulations affect investment profitability?

No Interest or Loan Fees: Hard money loans typically come with high interest rates and additional costs that can quickly eat into your profits.

They often cost less to acquire than other types of real estate, yet they can yield similar or even higher profits.

The property is important to us, and the numbers mustshow the deal will produce a fair profit, but as direct lenders (i.e., we lend our own money) we always bet on the borrower first.

He ended up partnring with another investor who was willing to front the repair costs, and they shared the profit on the sale.