I yea I know overtime thousand will go into the business.Where would your first expenditures go into ?

After that the holding costs start eating away..There is just sooo many little expenditures that go into flipping...

The expenditure will not affect your 2011 taxes.The $25K 'profit' that you withdrew from your business was a non-taxable cash distribution.

However, if their FS literally describe the line items as "roof contractor" or "plumbing contractor" that makes me wonder if they are potentially combining capital improvements and repairs, just as Ann Bellamy mentioned.Appraisers/analysts will include in the NOI a capital improvement "reserve" based on age, condition & market to cover estimated capital expenditures, just as Nathan Emmert mentioned.Often on larger projects, the lender or equity partner requires a Property Condition Report in addition to the appraisal.

The 10/15 mortgage puts your PI just about $180/month/door...so zero cash flow hereThe 5/20 will give you about $38/month/door cashflow.Don't like the financing or this price point you the truth.A good deal around $165K....and this assumes there is not a significant capital expenditure needed to rehab/repair.

Amol, The debt proceeds are directly traced to a specific expenditure, and the related interest expense is classified based on the nature of that expenditure.

Yes, it's going to increase your expenses and lower your cash flow but if you're knowledgable about the insurance process, having full RCV coverage is going to significantly reduce your capital expenditures.

If you're including projected, subjective, expenditures such as vacancy and CAPEX then you should also include the appreciation as well as the mortgage principal being paid off.This really is not a rule, its more how you want to cover yourself. 

You can depreciate some capital expenditures based on useful life (i.e. appliances can be depreciated over a few years vs. the building itself which has a regimented schedule) which should help.

I am new to REI and want to know what do you budget for capital expenditures, and maintenance for a house that is newly built?