Furthermore, there are numerous real estate investors who don't end up having much, if any, taxable income after all expenses and depreciation are calculated in a perfectly legal matter. 

Generally, the price you buy for at the auction is significantly less than what it would be anywhere else which leaves you a lot of room for error once you start the project (which honestly you might need being a new investor and all).

Out of state investing isnt an option for me now as i'd like to build up my monthly cash flow in my back yard; so when if I have errors out of region I have more of a cushion and buffer if and when I fail. 

It been about two weeks and numerous emails back and forth with no solution. 

Even if you see a 2 unit property listed as a lottery property, it is most likely an error.  

so if one vendor is say 10% and exluding some things.. the competition is going to do the same because if they include other things their return is lower and buyers will just default to the bottom line.. so that's why you have some that will put smaller cap ex in or less vacancy or what have U and really you never will know its all just based on experience.. until you own it and run it you will never know the true numbers.. you get that dream tenant that stays for 5 years leaves the home pristine.. your numbers are going to go way up.. you get in a situation were tenant is moving every 18 months which can be a good average and your numbers are going to go down.. you get one tenant that was rough and your turnover is 3k instead of 1k.. that throws things off.. just no way to know exactly.. so for me error on the side of caution if you do better great  pay down your mortgage or save for another.

My rehab bid came in just enough under my max threshold to allow for a 10% overage/margin of error.

Our laws are so tenant friendly that most people don't even do security deposit, because there's too much room for error and landlords have been penalized.

That's not perfect, either, but it's much closer to the $105,308 and within a margin of error, so it makes more sense to me.

This is actually the second time our house falls out of escrow, the first was because of an error on the part of the lender.