Purchase price: $30,000 Sale price: $63,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Bob Taylor, successfully completed a deal on Wellsley St NW, Roanoke, VA.

This is because a lender or broker are the "Middlemen" of the industry where they take the application, approve you close you but then sell your loan to us at the Big banks.

Your example:1M purchase, sale of $1.4M then a $400K gain is forgetting your rehab and sales costs of approximately $150K, so your real gain is $250K. 

Purchase price: $200,000 Sale price: $250,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Brittany Scandra, successfully completed a deal on Tower Bridge Dr, Pasadena, MD 21122.

If that property drops 5 you now have another $15k to come up with on top of the closing costs on that property.

Close, but away from it all.

But imagine you don't pay cash but rather borrow so your 5k cash/closing-down payment to buy a 100k STR, then in year 1 it rises 2k - only a paltry 2%, but you make a 40% profit as you are levered 20:1, and that beats the best year for stocks ever. 

Purchase price: $60,000 Sale price: $75,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Dale Oglesby, successfully completed a deal on E Market St, New Albany, IN 47130.

I have about 10-15k to play with which should be enough to cover closing costs and have a small bit in reserve If I can't find a Tennant.

But if you have done cost segregation studies and have 1245 / ordinary recapture to deal with, all of that income is taxed in the year of the sale, regardless of what you received for proceeds.Not previously as big of an issue, but in this world that we have had the last few years of 100% bonus depreciation, it is rearing its head more and more often.