If you have very high standards and you want to be involved in many decisions and are constantly being let down because no one carries about your properties more than you, PM sounds more appealing.

In case you weren't not aware, an improved or built-to-suit 1031 exchange allows investors to use a part of their 1031 proceeds for carrying out repair works in the replacement property.

@Javier D. you could assume the existing mortgagePay it off with a new loan and let the seller carry back a second.Leave the mortgage in place and transfer the LLC if the property is held in one.

Even cash flow in certain markets would not have carried the day in 09 to 2011.. 

You will also need money to carry the loan until you can exit via your exit strategy.

I think Big Bear would be a decent investment if we had all cash to purchase a property, but in carrying a mortgage, the juice didn’t seem worth the squeeze at the end of the day.

I have a contractor that I like a lot, have used a lot and trust, but he does not carry insurance.

Have 7 rental homes , I carry adequate insurance on them . 

Hey @Chris, another way to think about it is in terms of acquisition costs (most of your fixed costs, which are just buyers negotiable closing costs), holding or carrying costs (recurring payments of taxes, insurance, utilities, routine maintenance, etc.), renovation costs, and disposition costs (seller's closing amounts for transfer taxes and fees, realty commissions, atty fees, title fees, etc).

What depreciation really is in tax terms, is a deferred or pro-rated write-off over time.One of the cons is that if you purchase with cash, you will not be able to write off the entire out of pocket expense in the year you incurred it.Also, if your loan term is less than the tax term, you will also not write off the entire out of pocket expense in the year you incurred it.One of the pros, is that there are rules and exceptions to claiming and carrying over an annual loss, so depreciation actually makes this easier to handle.