On a side not I have decided not to take any money out of my mutual funds during the first two years so if I screw up during the learning stages I don't squander what I do have.

Unknown to most every lease-option home seller in the country, options have an expected value, any amounts collected in excess of what a fair market valuation would be can easily be shown as a principal reduction toward the purchase price, in court.

Loading up any more debt on the property than what makes you break even for tax purposes probably wouldn't make much sense (unless you have an alternate use for the excess debt you would be putting on the property).Of course I'm not an accountant nor do I play one on tv so all of the standard disclaimers apply.

Thai, You're leaving out a lot of expenses in the real world, including vacancies, maintenance, legal fees, evictions, damage done by tenants in excess of the security deposit, capital expenses (not technically an operating expense), entity maintenance, utilities (if only during vacancies), etc, etc, etc.

They are in varying stages of foreclosure and hoping to keep their homes.

It's the barbeque...Others may say that Texas has been adding jobs and population at a steady rate without the excessive run up in real estate prices.

Of course, no.Agreed, not to mention evictions, damage done by tenants in excess of the security deposit, lawsuits, utilities during vacancies, etc, etc, etc.

My exit plan is to undersell my area and strategically repair the house to be overbuilt for the area (staging helps here).

Closing fee’s = 3,000Commission of realtor = %6 = 4,800Rehab costs = 30,000Purchase price = 4,000Capital Gains = 5,7306% (Negotiable) return on rehab loan to investor = 1800.00Home Staging for sale costs = 600.00Potential Profit = 30,070.00Minus any carrying costs while the unit is up for sale.

The only goal that matters are the ones you make that progress you to the next stage.