Last night, I learned that there's a problem with the home: during the inspection, six gas leaks were identified, and repairing them will cost approximately $7,500 in labor and materials.

Very true, you make your money when you buy and that formula is dependent upon your search abilities, how big of a net you cast to find opportunities, your negotiating skills, your ability to identify great locations (often near good schools), and your ability to transform the property.

If you decide to go with it, understand that you're taking some risk.And, speaking of risk, the main risk is the IRS focusing on this strategy at some point and identifying it among "abusive tax strategies" as they did, for example, with notorious conservation easements.

Let's say your inspection comes back and identifies some matters that concern you, but your neighbor feels are inconsequential. 

Look at price/rent ratios to identify if the property is a high cash-flow market. 

We identified the problem areas, built a great team, and developed a system to win the Detroit real estate game—and we never looked back.

As of now, many potential sites were either identified by broker/developer or too expensive to acquire.

What's more, there are some pretty strict rules about how many replacement properties you can identify and when.

You’ll need to identify a replacement property within 45 days and close on it within 180 days.

This deal reaffirmed the importance of identifying properties where minor improvements can lead to substantial returns.