At this point I am using Mass Save not to convert to gas, but to replace my oil fired unit with another one because the quote I got was for $6250.A little over a month after buying this property, I have paid another $5950 in cash, and took out a 0% interest loan for the other $6250 over 5 years in unexpected but necessary expenses… Please don’t take this as me complaining, because I am not.

You’re going to have an occasional needy guest, difficult request, or unexpected cancellation that falls outside of your policies.  

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Since it was brought up earlier I figured it was worth mentioning what is always or sometimes exempt from bankruptcy:-State and federal income taxes within the last three years-Student loans (mentioned above)-Vehicle accident claims due to drunk or reckless driving-§523 Bankruptcy Code, money obtained by fraud:§523 Bankruptcy Code-Eve of bankruptcy luxury purchases-Willful and malicious injury to another or his property-Government fineNone of that will really help you at all, but I figured it would be good to know anyway ;-)When you make loans you assume default risk.

I would ONLY recommend Nathan's suggestion in extreme circumstances, he did not factor in the taxable amounts on the 20%+ return in the projected scenario either.here is why I believe the returns are low for the risk and headaches in an IRA for buy and hold: You lose the depreciation deduction because the IRA is already tax deferred; you must make sure that you have excess funds sitting in the IRA and held by your TPA earning 0% interest (you need these funds in case unexpected expenses arise; you have a part time job for your IRA that can not pay you anything for your time and effort; you have to be so very careful as to not do anything that could be construed as a prohibited investment; and finally, a 10% or even 15% return in an IRA for having such risk and a managerial headache is not worth it in my book.I suggest you make that very same 10% (or more) making loans to rehab flippers at low LTV's and get the same or better returns without any managerial headaches and if you do it right, with no risk.

I obviously not been factoring in, what did you say, 40% for unexpected expenses.

It takes awhile to build up the network and properties to create a full time income.It's also important to have lots of reserve cash for unexpected repairs and vacancies.

I have gotten in this situation with Juniors on the west coast, but mine were weirder  bank said the junior was reconveyed by accident and is still valid.. the bank brought suit and we settled but what was a great deal became a break even deal so at least we did not get hosed.Auctions from what I can see out your way are far more complicated than our auctions on the west coast.

I recently ran this scenario and unexpectedly came to the same conclusion.

Adding 20% to contingency and not adding in any major unexpected repairs that wouldn't be know as of now I used 20K in my ratios for the reno budget.