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.

As rent passes the monthly expenses, use excess to pay prin.4.

You're missing many of the expenses such as management, vacancies, legal expenses, capital expenses, damage done by tenants in excess of the security deposit, etc.

With inventory slated to substantially increase the next 6 months due to increasing foreclosure rate, the system could take 12 months or more to shake out excess inventory.