Creative finance can get you into a lot of debt if you aren't careful because most of the deals requires large dollars being leveraged.4.

Just make sure to manage your debt.

Also, does the debt of the replacement property really have to be equal tto the debt of the original investment property?

Thus, your tenants are paying the debt service on the financing for your fix-and-sell deals.

That description has you $258 in debt at closing, something is wrong with either what you wrote, or what I read!

Accoridng to an analysis tool I have used, I can expect the following:Gross Operating Income: $11,500 (allowance for vacancy)Annual debt service (at 7.5%): $8810.16Taxable income: $7,310.17Net Operating Income: $7,990.00Cash flow before tax: -$820.16Cash flow after tax: $1738.40ROI with appreciation (assuming 5%): 33.39%Cap rate: 6.95% (I don't know what this means -- can someone explain?)

By becoming an educated investor you can all but eliminate risk.

The IRS has several criteria for being "active", including stuff like if you are personally liable for the debt, do you make decisions reguarding operation, how many hours you spend managing, stuff that shows you really do have an active role in the investment.

Buying right can sometimes eliminate taking cash out of your own pocket and therefore leave the need for rehabs very small.If the property you are purchasing going to be your personal residence?

My plan is to buy the $200K+ house @ $115K, refi, pay down all my debt, and use the huge chunk of freed-up money to buy my next.