When you sell the property and gain the difference between the sale price and the cost to you, that's profit.Net profit to you on a rental is the cash flow. 

If you were not, you’d save the same taxes as strategy 2  Or 2) You’re going to spend money (capex) that will be added to your cost basis giving you a higher yearly depreciation.

Condition of a property and the cost to repair is just one of the risks in this business and you have to consider that in your buy price. 

Very little out of pocket cost. 

Food cost, Insurance cost, Drinking cost, eating out cost are all going up.  

They'll both come with MI, but with FHA, you MUST refi in order to drop it, which will cost you an additional $5-10K and who knows where interest rates will be when that day comes, so it could be cost prohibitive to do so. 

However, for every other year you will be paying these costs or at least needing to budget for them, and they will likely take away all of your margin.  

Let’s see some of those “uh-oh” moments.DIY Disasters: Tried to do something yourself to save money but ended up costing more?

It will cost me and extra $200 a month for the added flood insurance but I was told it will likely double or triple in price once it is no longer a primary residence.

We financed the Bristol St deal using Partner Driven's capital, covering the $167,000 purchase price and $41,000 renovation costs.