Expenses incurred before the property is in service are considered capital expenditures and must be added to the property’s basis rather than deducted immediately.This means costs like rehab expenses, repairs, and other improvements made before the property is ready to rent are added to the property’s purchase price and can be depreciated over time once the property is in service.

Purchase price: $2,800,000 Cash invested: $560,000 The property is a three-story multi-family residential building with six independent units, initially facing significant challenges due to poor conditions.Renovation Investment Summary:- **Structural Repairs:** $250,000- **Kitchen Modernization:** $100,000- **Bathroom Updates:** $50,000- **Exterior Improvements:** $100,000- **Holding Costs:** $50,000- **Property Taxes:** $30,000- **Insurance Costs:** $10,000- **Management Services:** $10,000

Keep in mind travel time, repairs, and lifestyle to manage the out of state rental.

Mine was also out of state, in a town I’d never visited, and I relied heavily on videos from my agent.This sounds like a tough first deal, but it seems like you have some capital on the side, which will be useful as you face the upcoming challenges and learn from those expensive early mistakes.Regarding the subject of this post, “help me adjust my expectations,” I’d recommend assuming that; repairs will cost twice as much as you estimate, maintenance and vacancy rates will likely double from your initial projections, there’s a very real chance you may lose money on this deal.That said, there are ways to mitigate these risks by:- Keep asking questions here on BP and connecting with local experts- Stay proactive and communicative with your agent and property manager.And remember “Inspect what you expect.”Im not trying to discourage you but to help reset your expectations.

Told me the violation wasn't corrected in the 30 days required timeframe (yes you are correct, the repairs were done in time but they didn't come out to confirm). 

This was an Oct 15th acquisition and took about 2 months to clean out and repair/rehab. 

Though my property management company eventually took care of the eviction proceedings and repaired the property to prepare for a new tenant, I feel they were negligent in their duties.

Let’s break it down with the 70% rule to see if it’s investor-friendly:ARV: $190,000 (taking the middle of $180K-$200K)70% of ARV: $190,000 * 0.7 = $133,000Minus Estimated Repairs:Roof: $20,000AC: $4,000Additional repairs (general estimate for a property needing updates, say flooring, paint, minor plumbing): $10,000-$15,000Total Repairs: approx. $35,000Max Buy Price for Investor: $133,000 - $35,000 - $10,000 (wholesale fee) = $88,000Since you’re getting it for $91,000, you’re close, but to make it irresistible, consider negotiating the purchase price down a bit further.

Fourth: even if the entire deduction is available, it results in much smaller automobile deductions in future years and extra taxable income when you sell the vehicle or trade it in.

I have actually been thinkin about cutting losses honestly, I am not sure this is the best investment I could have made as my first but worried about how much of a loss I would have to take.It is meant for S8 for sure, I would have a stringent application process, and give the neighborhood a C from my research.I invested there because it was the first deal that basically fell on my lap where the mentor works with agents that Seller Finance deals, it was only $3k down and had thought the proximity to St.Louis would be attractive to tenants also.I effed up on waiting to post for rent until after all repairs and the COO for sure.