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.

Talk to local attorney on legal aspects and documents to structure this.Occasionally the seller will be open to carry as 2nd loan for the portion of down payment

The owner is carrying the note at this time but I am about to get a couple of the houses in my name.

I've attached my numbers in this link: 4-plex AnalysisTo finance this deal I'd take a hard money loan for the purchase and use a HELOC for renovations and carry + closing costs and then cash out refi into a traditional.

Once you pay for the materials, contractors, carrying costs, taxes, etc the net is $15,000.

Ideally you want to run around 70% on BRRRR, so if your ARV isn't $379,000 then this is going to eat into your ability to "Repeat".Also, a year is a long time to carry $265,000 IO at 7%.

Depending on how many other mortgages you're carrying, that could also affect qualification. 

Similar to a person who carries a gun forpersonal security.

How many mortgages can you carry?