(unless you can get a regular loan, and then just do that.From then on, you pay insurance, mortgage, repairs, maintenance taxes, and everything else that relates tot he house.  

They want a high cap rate when the local to out of state buyers with an exchange with tax consequences are willing to buy lower on the cap rate.If they want value add they are also up against developers and other seasoned investors in the states with a long track record already and relationships with these sellers.

Final bonus for California investors is prop 13 will ensure minimal property tax increase so as profits and value increase the taxes stay fairly flat.  

A 1031 exchange would be used to sell an existing property you own and buy one (or more) replacement properties without paying the capital gains tax on your sale.  

I also write off the utility expense on my taxes.

By all means, chat with a CPA, especially about 1031, tax implications and so on.

When I come back in the next morning, I have the tax billing address pulled from the county for every cash purchased home that I uplaoded.

Budgeting 2740 for taxes, 1000 for insurance, 1500 for annual maintenance, and 2560 for utilities.Now on to the questions:-the water in my area is billed on a flat rate of 180 every three months.

Can we ditch income tax coming from that construction ?

Are there special short-term / long term rental taxes for these type of properties.