You get that back if you sell, but if you keep it as a rental it takes 153 months or 5 years to break even on your down payment alone.https://www.redfin.com/IN/Indianapolis/1515-E-Kessler-Blvd-Dr-46220/home/66981054ARV / Sell Price$235,000We Calculate All CostsPurchase Price$152,750 65%Closing Costs$2,000Rehab$30,0006 Months Carrying Costs$9,114Real Estate Selling Costs$14,1006%Other$0Other$0Total Rehab Costs$207,964Now We Calculate ProfitARV / Sell Price$235,000Total Rehab Costs$207,964Gross Profit$27,036IRS Tax$4,05515%Net Profit$22,981Per month profit$3,8306Loan Down Payment$30,55020%Loan Amount$122,200 80%Loan Cost per rmonthPrincipal & Interest$8137%Prop Taxes$321Insurance$168HOA Fees$0Monthly Payment Costs$1,302Monthly Payment 1$1,302Monthly Payment 2$1,302Monthly Payment 3$1,302Monthly Payment 4$1,302Monthly Payment 5$1,302Monthly Payment 6$1,302Utilities for 6 months$1,302Total for 6 Months$9,114

Then, you sell and keep the profits tax-free because of the capital gains exclusion.

I am interested in purchasing tax liens and properties at deeds sales to create a STR and LTR portfolio.Would love to connect!

…we are waiting on $$$ for taxes, water and gas to run boiler system.

I happened to start learning about private equity funds, stakeholder capitalism, and the housing crisis last week and also started getting more active on the BP forums.I posted about struggling with finding investors for syndication and got some good comments about why this is the case for many syndicators right now.One comment referred to something about FEMA flood insurance rate maps and that rang a bell in my head about a random old piece of land I got a few years ago when I was heavily into tax deed auctions in Florida.

I will share my "Most Expensive Lesson" in the comments.To kick things off, here are ten examples of expensive lessons or mistakes in real estate investing:Underestimated Repairs: The classic pitfall where the cost of repairs and renovations far exceeds initial estimates, impacting the overall budget and profitability.Tax Liens: Failing to account for or being unaware of existing tax liens on a property can result in unexpected financial burdens.Contractor Liens: Not settling payments or disputes with contractors can lead to liens against your property, complicating sales or refinancing.HOA Fines: Overlooking or violating Homeowners Association (HOA) rules can lead to significant fines and headaches.Bad Loan Products: Opting for loan products without fully understanding their terms can lead to unfavorable financial conditions, such as higher interest rates or unfavorable repayment terms.Ignoring Zoning Laws: Investing in a property without a clear understanding of local zoning laws may restrict its use, affecting your investment strategy.Overpaying for a Property: Lack of research or getting caught in a bidding war can result in paying much more than the property's worth.Neglecting Due Diligence: Skipping thorough inspections and background checks can uncover unpleasant surprises after the purchase is finalized.Poor Tenant Screening: Failing to properly screen tenants can lead to unpaid rent, property damage, and costly evictions.Underestimating Market Risk: Not considering market fluctuations can lead to investments that don't pay off as expected, especially in volatile or declining markets.We've all been there in one way or another, facing setbacks that seemed daunting at the time.

At a minimum, I recommend selling it within three years of renting it so you don't lose the tax free gain on sale of a primary residence.

Here is a site LA county site for the Tax Auctions:  https://ttc.lacounty.gov/schedule-of-upcoming-auctions/HTHS

For you investors that have ordinary income to write off let me tell you the greatest secret to minimizing tax liability, Cost Segregation.When coupled with zero down seller financed purchases the numbers get crazy.These numbers below are one of two parks I bought zero down with seller financing last year.This one park one year is a $140,834 write-off equal to $40,842 in tax savings and the second park is $14,000.I am projected to save almost $60,000 on two community purchases that I don't have any of my money invested into, they were true 0% down parks.Don't kid yourself, real estate is the best investment opportunity that exists.

So, you are going to pay down your mortgage with your after tax dollars to pay down debt that you will then turn around to pay closing costs to recoup?