Many investors make good money, but they are miserable.There are several serious assets a person should have before they jump into real estate investing such as:a) enough cash to handle the unexpected repairs, vacancies, tenants who don't pay rent and legal costs,b) enough math skills and many other experiences about properties to understand whether or not the purchase of a property will result in a profit,c) enough math skills to calculate your profit at the end of every year and this includes understanding enough math to calculate your profits from depreciation, rent income, rent increases, property appreciation and increased property value that results from rent increases e.g. using the Gross Multiplier.d) the mental maturity and skills it takes to deal with tenants who, who destroy your property, don't pay their rent and then to deal with evictions and attorneys without getting stressed and going insane.e) be knowledgeable about real estate rent laws andf) ability to produce accurate bookkeeping records for banks annual audit and the IRS audits.So, when many people ask if the real estate business is good to get into I don't think it is right to just tell people, "'Anyone Can Do It".

People will use Turbotax which is fine for plugging in numbers, but they don't tell you what you can legitimately claim, so in an audit you are left holding the bag.

also if you get over 100 investors no matter how small and you have compliant audited financials for shareholders as required you can elect to become a REIT then you qualified to have people invest 401 K money from approved Banks and Credit Unions Retirement accounts.

I understand this is a high likelihood of being audited. 

I am not sure if a tenant will hand over their financial information to a new landlord; really no good could ever come to the tenant who provided this; unless they were honestly unable to pay rent and begging to break a lease or renegotiate.When we are acquiring a new property we perform a lease audit on the tenants that you are inheriting.

. $1m property also isn't $800k in building value).The 2 recommended options are DIY modeling or Cost Segregation:DIY Modeling: Come up with some expression you could reasonably defend in county court if you get audited somehow.

Talk to your accountant about this to avoid an audit surprise.This is the part of BRRRR that nobody talks about; in most cases you are leveraging over your purchase price and it often results in negative cash flow.

There is also a Portsmouth law firm who sued PRHA when they broke protocol and hired a non-federally vetted attorney to represent them in a lawsuit that resulted in a huge HUD audit and the PRHA director for 40 some years losing his job. 

I don't use Quickbooks, but my records are so accurate I was audited a few years ago for all my businesses and nobody could find where my records were one penny off.

Although an audit would be the ultimate test of that theory.