Maybe you’ll have bad tenants that don’t pay rent and have a higher vacancy rate than 5%.

In the Midwest and in the great state of Texas where appreciation has been minimal over the last decade, then your returns will be a lot higher.

The sales history showed a higher amount than I paid for the property and the assessor set the newer rate based on that sale.

i don't know, if i have to worry about less than $20 per month, when i get an extra $4,000 to $5,000 in my pocket, than i am in the wrong business. plus, i plan on selling using a wrap to create cash flow. grant it, i'm talking about homes in the $80,000 price range.it would definitely make a difference on higher amounts.jim

In reality, the risk is higher than just about any other type of REI deal.

Unless it needs repairs and will have a ARV of much higher.

Others go higher than that.

Are there other things I can do to reap higher profits?

Common sense would tell you not to do this, but people do it on a smaller scale all the time, by assuming a shorter mortgage and/or a higher down payment.

If you refinanced to extract equity for future investment, your payment would go up because:- You have increased the LTV ratio; decreased the buffer of equity---rates will be higher.- You will most likely have to pay MI (or a higher payment if the lender pays it for you)- Your blended rate will be higher then your previous interest rate (if you have to go with a combo loan).Regards,Scott Miller