hello alli researched the cos seg issue. i think its too much of a hype. basically it all comes down to accelerated depreciation. eventually you will pay it back as time progresses or when you sell the building. however, the cost seg report is not a cheap one do to. so net - you lose over the long run.

Based on the other replies the math probably won't work for a small investor, so I'll probably wait for the next downturn to get some cheap 2nds when there's too much debt for the bigger players to gobble up themselves.

My prediction: you lose this deal over what you're thinking.

I am not very smart here but it appears that you will be paying 14k out of pocket for the priviledge of losing $330 a month in the best possible scenario.

First It is fraud second if you lose your tenants and can’t make the payments you may lose your primary residence.

If you sell with an agent you are going to lose 60-70k.

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Is the worst case scenario that you cannot refi and have to hold for an extra period, or is it that you are borrowing the funds and lose money because you are out 50k for the rehab/refi?

NPL's - If house prices start to fall, that can have an impact on NPL's as sellers are not concerned with NPL property values and holding costs, but if housing turns, then holding assets which have out of pocket costs AND are losing value will force them to sell much faster.Seller financing vs. institutional paper?

Do not lose sight of the principle that growth rates magnify with the size of your investment.