I had a great conversation with @Kay Kay Singh today about the depreciation of gas stations, and thought I would share some relevant information regarding the tax laws for the general benefit of the BP community.Gas Stations (or 'retail motor fuels outlets' as they're called by the IRS) are depreciated over 15 years, and not 39 years like almost all other commercial properties.If any one of the following three criteria are met: It is not larger than 1,400 square feet. 50% or more of the gross revenues generated from the property are derived from petroleum sales. 50% or more of the floor space in the property is devoted to petroleum marketing sales.Here is the link to the IRS publication on this subject where the above words were take from.

The rents are definitely below market currently, however the property can still generate some nice income where they currently are.   

If the property is generating a good amount of cash and you're happy with it I wouldn't make a big deal about the furnace and water heater - especially if the seller is covering the roof. 

I realize you were using it to make a point about various other expenses that could effect the profitability and it works for your purpose. 

Nice profit at the end of 20K or so.

Since my current living expenses are very minimal and I have a unit generating income I would much prefer the brrr strategy. 

Investors do this because they have to make profits on as many deals as they can.REOs are a side business for banks and they do it because they have to.

Whatever profit or loss is calculated from that will either be added to your income or added to your monthly liabilities. 

I have $10k in profit, and my original $500k back to lend to the next person.Let's say I flip that same $500k 10 times in a year.I just earned $100k on $500k.That's a 20% ROI.In reality there's a lot more going on, various estimates say the net cost to originate a single loan is $4500 to $8500 mostly due to Dodd-Frank and CFPB... probably 0.5% of your interest rate is just that alone.

This is my big concern about investing in a rental property to generate passive income here.