Hello Kenyatta, I'm also new to New Orleans and actively getting involved in REI.

In the Bigger Pockets free book, "Real Estate Rewind", as one of the 11 co-authors I wrote about one such Tax Sale purchase and made money but not enough money to warrant the risk involved.

Actual cost takes into account depreciation so complete destruction of a property could leave you under water in terms of the amount paid for the loss.

Again, consult your tax accountant. 

@Vidit MainiYou should have a consultation with a tax accountant to learn about tax strategies. 

I was involved in two small infill developments in Michigan (about 15 houses in total) so two very small parcels. 

My humble advice to anyone attempting to do creative finance is:Creative finance is for experienced investors who have access to capital if anything goes wrong.Learn the lawsDon't use a contract "off the internet", laws vary by state and are also regulated on a federal levelLearn the financing techniques correctlyDon’t skip parts of the processDon’t ever do a “kitchen table” closingUse the proper deedAn attorney can help you with the legal work, but the rest you are on your ownYour guru will not bail you out“Investing” in someone else’s deal by providing a small 2nd loan so the “investor” can pay for “cash to the seller” and for “closing costs” so he can do the deal is a very bad planKnow what problems can ariseLearn the responses and solutions to problems before they are neededKnow everything there is to know about Title and what that meansKnow who a "protected class" individual isLearn the "back doors"Learn human natureUnderstand timelinesUnderstand regulation enforcement (some of these "mistakes" have a 10 year statue of limitations ( they can charge you 10 years AFTER you do the transaction) and carry hefty fines and possible imprisonmentThe court doesn't accept "I didn't know" for an answer"Know that the source of the lead plays a serious role in some states and federallyKnow how much of a "profit" pushes the boundaries to invite an investigationYou can be sued by the seller if you don’t do things correctlyYou are automatically at fault if an investigator or attorney or regulator gets involved.

Leverage magnifies return. 3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR.

Set up a Joint account with the seller so you can make deposits to continue the automatic payments to the lender until you refinance the property.Thanks,Dustin

Make sure to account for property taxes, insurance, and any HOA fees, as those can vary significantly in different markets and impact your cash flow.