Things like vacancy, collection losses due to non paying tenants, turnover repair costs and unaccounted for capital expenditures probably surprise many.

More than once I have warned new or would be landlords that buying the property is the easy part.  Owning and maintaining is the hard and expensive part.    I was reminded of that first hand this week.My tenant called...

I call it capital expenditures. $100 per door cash flow - sounds tough. 

There are not many single family rentals that can support large capital expenditures paid from cashflow every few years and still remain reasonable profitable.

Monthly Income: 1100Expenses:•-Repairs/ Maintenance – 50•-Real Estate Taxes – 112.50 (1.2%)•-Insurance – 30•-Vacancy Costs – 83•-Capital Expenditures – 100•-Total Monthly Expenses: 375.83 Downpayment: 18000Loan Amount: 72000 (with 20,000 rehab money)•-30 Years @ 5% interest Closing Costs: 4000Total Initial Investment: 22000Monthly Mortgage: 386.51Cap Rate: 9.54%Monthly Cash Flow: 329.32ROI: 17.96%After evaluating this, if this property was in a better neighborhood with less crime, would I be naive to pursue this property?

Are you accounting for vacancies, repairs, capital expenditures in those numbers?

Hansen more and more each day for proof of expenditures and work completed.  

The usual scenario is to leverage your return higher by borrowing at interest rate lower than your cap rate.In your example, assuming no capital expenditures, loan costs, closing costs, etc... a 7.7% CAP and 80% loan, rough estimates of your CoC return at different interest rates might look like below: Interest Rate Cash on Cash Return 4.0% 15.6% 5.0% 12.7% 6.0% 9.7%As you can see the lower the interest rate on the loan the higher the return.Cheers...

Many times investors will do this by managing better or making capital expenditures that justify charging higher rents.

The expenditure should be in the same calendar year to wrap it in with your tax credit.