Operating expenses include taxes, insurance, management, maintenance, vacancy expenses, advertising, utilities paid by the owner (at least during vacancies, rehab, etc), evictions, court costs, entity maintenance, legal fees, common area upkeep, lawn care, snow removal, office supplies, damage done by the tenants (in excess of the deposit), lawsuits, capital expenses (although not technically an operating expense), etc, etc, etc.

Operating expenses include taxes, insurance, management, maintenance, utillities paid by the owner (including during vacancies), advertising, entity maintenance, legal fees, evictions, court costs, capital expenses (not technically an operating expense), damage done by tenants above the deposit, lawsuits, office supplies, etc, etc, etc.Mike

If the developer goes out of business you have no guarantee.Third, the supply could exceed the demand so that after two years there is little rental demand at the guaranteed level.Fourth, your home is at risk if you pull out cash and then later can not afford to pay it back.Focus on reading here and learning your local market better.

Ive never flipped a house before, I have no idea what supplies and materials cost, and I dont know what's a good price for a decent contractor.

I was asked this in a PM by somebody, so I'll be happy to supply the info here on the forums.

The point the authors make is that while many people are leaving the marketplace due to the media's drumbeat of "crashing RE markets" and the increase in market supply, savvy investors should be buying as many good deals as they can instead of sitting on the sidelines waiting for the market to finish its correction.

-does this defy the supply/demand theory?

In addition to supplying this letter I have been requested to supply full names, loan numbers and SSN#'s of all parties on the loan before anyone would speak to me.Another very important factor is not to be rude or short to anyone you talk with.

I am a salesman for a wholesale plumbing supply company.

There is little supply of rental "houses" and based on the advertising I have observed, they seem to rent rather quickly.