One unexpected move out and you're paying the mortgage.Where as with an apartment, you have economics of scale working in your favor.

Can your reserves handle an unexpected $150k expense?

There will be some unexpected dogs and some actual diamonds.2.

Cash flow is great but you are only a couple of unexpected capital improvements away from a mediocre if not negative return.

I spent the other $2400 on unexpected repairs (HVAC & plumbing).

The income from the property has to cover both the debts and unexpected costs.

I also recommend getting a full inspection during the option period to make sure there are no unexpected repairs (foundation, termites, wood rot).These are the two basic real estate strategies that are just the tip of the iceberg.

If the first deal will cash flow well, then it is easier to get a loan for the next proporty and you have more money available for unexpected things that happen with every rental.

To the delight of the private lender.

I think the 12k really makes the risk go higher in case something goes wrong that is unexpected..Using the MAO formula215x.7-35k = 115k but I don't think this is too realistic..