We pay all of our expenses out of that which includes: broker split (my brokerage takes 22% of the total commission, this varies by brokerage and is typically anywhere from 5-50% depending on how much support the brokerage provides and whether or not the agent is on a team), transaction fees, transaction coordinator cut, income taxes (15-20% of what's left after broker gets their cut), errors and omissions insurance, MLS fees, board of Realtors dues, required continuing education costs, vehicle and vehicle insurance plus maintenance, repairs and gas, health insurance (also health insurance for the family if they are the sole breadwinner), technology fees, desk fees (office rent), marketing materials, advertising/ lead gen, etc.

Paying off the notes, working to pre-emptively make repairs to capex items before they fail or become a major issue think roof, HVAC, and foundation.

Often times they come back with a list of repairs that they would like to see to protect the home or mitigate liability. 90% of the time those items were on our list to fix anyway, and sometimes we even haven't done before we get the letter from the insurance company.

Hey Christine, I might be biased, but you could look into Cleveland, Oh.Here are a few things to consider against investing there:- Slower appreciation compared to some other markets- Harsh winters, which can lead to higher maintenance costs- Many discounted single and duplex might need repairs or updates, especially if the previous owners haven’t kept up with maintenance over the years- Some local regulations to be aware of (nothing crazy, but worth noting when trying to close deals).But there are also some solid reasons to invest in Cleveland:- Affordable properties in the $100K-$300K range- Strong long term rental market due to a high rent to price ratio- Landlord friendly laws overall- Potential for great cash flow- Opportunities for Section 8 tenants- stable market once you have the right team in placeEvery market has pros and cons so it comes down to your budget, risk tolerance, and finding a reliable crew you can trust.

Tell him you'll give him a call :) This is one of the reasons why we tell tenants they need to vacate the property for any major repairs.  

For example do you have a great w2 and can you afford to cover costs of a major repair or 3 months of vacancy?

Delays, unforeseen repairs, and underestimating budget up front are all much more dangerous occurrences once a gap lender is involved. 

Even with the mortgage paid off, some of the $2000 in rent will go to maintenance, repairs and property taxes.

And 3 days a year I spend about 30 minutes pondering a repair, rent increase or turnover choice. 

Any repair issues the new acquisition has you will feel to much greater magnitude due to the property carrying a lot of debt.