And I'm sorry, I definitely made a mistake.

I recently bought a property that was in a 'flood zone' and required Flood Insurance because of a loan.It made me think twice for a day or so, but after research (driving around/looking at aerial maps/talking to neighbors, I came to realize that there was almost zero 'real' risk.As you so astutely pointed out....this creates opportunity for investors that can do the research and can stomach a little perceived risk....

This is, obviously, the worst outcome that could happen for all parties involved.There is a very famous saying that has become a key guiding principle in real estate fundamentals: Money is made when you buy.

The balloon term, is when things get renegotiated or per terms of loan, a change in P/I is made.5 years is not the Payback period.  

What made you interested in investing in this type of deal?

Ohhhh I get it now, I was thinking in terms of the current NOI which is 132,000 and with the new 6.6 cap rate she was talking about this made me think the property was going to only be worth 2milWhat your saying is to forget about the old 132,000 annual NOI and now with the increase in rent this would bring my new NOI to 165,000 and with the 2.5mil PP which wouldn't change that would bring it to a 6.6 cap... so the property isn't worth less when I buy it I just get more cash flow since the opportunity to increase the rents is there.Still you can correct me if I am wrong but I think I got it now

And if true, does it matter what order I do the following? 

This is a model of retirement I could get behind.In order for this model of retirement to work, you have to imagine that you could find a way to generate income without you having to do anything (i.e., passive income).This additional income would cover your living expenses, or perhaps even more, making it possible for you to quit your job and start a new adventure, or continue working your job, but with the mindset that you get to do it, rather than have to do it.Retirement 2.0 is not a stage of life that comes at the end, a last hurrah.

Purchase price: $210,000 Cash invested: $53,0003 bdr 1 bath sfh in a B+/A- area in Rochester.What made you interested in investing in this type of deal?

I have made some upgrades since living here, fully renovated the bathroom and laundry room, upgraded appliances, added a tankless hot water heater, and replaced all galv. pipe with pex.