OVERALL QUESTIONSI’m wondering if there are any “gotchas” I should look out for in managing or renting either of these properties, especially regarding taxes, maintenance, or any other unexpected costs.

Like @Michael Quarles and @Kristin Flores-Brockman are saying here.Occasionally there are investors who acquired an investment property with the intent to hold and put renters in, but find some unexpected negative catalysts that will impact their ability to rent it out.

Cash flow will provide you with a steady income and a safety net for any unexpected expenses, which is especially important when starting out.

As with any type of investment, investors should list the estimated costs to calculate their potential profit.Costs to consider on fix-and-flipsRepairs (always be conservative)Carrying costs (interest, points)Monthly costs (utilities, HOAs, insurance, taxes)Buying costs (back taxes, cash for keys, liens, code violations)Selling costs (commissions, closing costs, transfer fees, title insurance)Unexpected costs (add $5,000 to be safe)These are the basic costs investors should consider.

Just make sure you’ve got a backup in place for any unexpected expenses that might pop up—trust me, they can happen.

Also, try to budget for unexpected repairs, as REOs can sometimes have more wear and tear than anticipated.

Initially, I underestimated expenses such as property management fees, maintenance costs, and unexpected repairs.

Renovations often come with unexpected challenges and expenses.

I experienced this myself when I had 25 units a few years ago.You will have evictions, turnover costs, unexpected repairs/maintenance, CapEx, vacancy, etc.

- What should we look out for during the walk-through to mitigate unexpected expenses?