"Failure is a component of success.The opposite of success is not failure,its mediocrity (playing at a level below one's capability)"-one author said.there is need for massive action by us newbies (generate leads,make offers,follow up)

Kristen,There are three components to starting out as real estate investor.. 1) good credit this will be important later 2) 20 to 30% below market real estate properties you can buy 3) cash to invest.

A key component in reaching that middle ground is responsible ownership.  

Look at all the individual components, roof, driveway, heaters, etc and try to estimate useful life and then replacement cost.  

Sure enough, I missed it the last time I looked at this, but Table 2-1 specifically mentions "waterpipes" as part of the structural components that get depreciated over 27.5 years.

In theory, the property should pay for itself and be able to renew the major systems and components...So add for reserves and maybe up the repairs and you may zero in on realistic, overall expenses.

I helped managing large real estate portfolios, analysis on asset pools as well as individual assets and determine their best exit strategy (Flip or rental) based on different components (IRR, NPV, Cap Rate and ROI).

One thing I've heard from a CPA here in MA was to depreciate components while you are depreciating the house.

Maybe a CPA can fact check me here.Cost Segregation: This only really makes sense when you get into properties worth $750k+, but basically you're able to pull a bunch of the depreciation forward by segregating the property into its various components and depreciating those components on their own schedules.

Since the Mixed Building has this commercial component, my banker suggested that I ask the seller to sell the two parcels to me separately, that way, the Bank can offer me a residential mortgage on the Residential Building (30yr/3.45% fixed).With respect to the Mixed Building, he said I would have to get a commercial loan.