It may not stink too badly at first, but as you scale it becomes a compounding probability and it can really be a doldrum. 

The optionee has this privilege because he/she has given the property owner "consideration" (payment) in return for the property owner's agreement to sell should the optionee decide to purchase.Additionally (if specified in the option agreement) the optionee may sell/assign the option agreement to anyone he/she chooses. 

In our case, we consistently reinvested those returns to take advantage of the compounding, instead of adjusting our lifestyle.

It's also worth noting that IRR is NOT equal to a Compound Annual Growth Rate (CAGR).

At your age, the power of compound interest will just keep it growing. 

However, you will present them with option 2, in which they will carry the note for 30yrs, at 6% compound interest, with no down payment, the number will look like this:You will pay them $599.55/month for 30 yrs.

I'm an active duty service-member and plan to stay that way for another 16 years, not only not secure a comfortable retirement, but because the privilege of service is something that I love and wouldn't give up for all the units in the world!

Compounding that mistake by many others throughout the rehab schedule is how you end up upside down on equity.I find it's better to buy with cash and use hard money for the rehab but I understand that's not always possible.

ForEx I expect 60% per annum, I prefer 5% compounding monthly.

@Bjorn Ahlblad It's my privilege to push the button on your #5,000 upvote.