I told him I will work with him on a pure option deal.

However, if you pay less for the new property then you can be liable for the difference.I have never stepped down in a 1031 exchange so this is purely conjecture... but I would guess that your tax liability would be something like this: $Sale price of your current home- $Sale price of home you buy through 1031--------------------------------------------------- $Boot $Boot- $500K------------------ $Taxable gain

I don't think pre-approval letters are "worthless" but they are if you take them at pure face value without talking to the loan officer directly.

Instead of trying to put a number on something that I can't possibly know and that is purely random, if I use the 45% to 50% total expense number that has proven true over hundreds of thousands of rental units, I will be MUCH MORE ACCURATE.

If you are able to get a 30yr fixed @ 7 percent and roll all of your improvements into the loan, you are looking at around 300 a month extra, but thats not pure cash flow.

I also like the idea of providing SOLUTIONS to people's problems instead of just looking at it as a pure money-making thing.

Probably can't be measured in pure $$ but will make living there more enjoyable.Adding a bath is IMO (and statistically proven) a moneymaker, particularly if you can do most/all work yourself, partiuclarly the "finish" like tiling, because it's very labor intensive.IIRC single bath houses have been considered "technologically" obsolete since the early '80 by the Amer.

The financial data used to determine the market cap is pure fiction; the resulting market cap is therefore nonsense; and the majority of residential units in the United States are owned by small investors - the majority of whom fail.

If you carry a 30-year note at 10% (just as an example) with a $2K down payment on the same property it'll take you 9.5 years to recover your full $25K (the payments are almost exactly $200) but then the 20 years after that are pure profit.

But, not pure appreciation.I do recommend checking with the lender.