I’m thinking of taking out my 401k, getting taxed but hopefully try to recuperate the money through depreciations.

You see I'm worried about accepting tenants with income that you can't garnish (Social Security Disability, Child Support or veteran's benefits) which makes it risky for a landlord to recuperate losses if the tenant doesn't pay.

He was planning on putting in new store fronts, residing the building before renting it out, but it took a while since he's recuperating, so the place look vacant of over a year.

Now that the investor purchased the mortgage note from the bank HE then becomes the "BANK" and is allowed to try recuperate the 100k owed from the borrower.

You can recuperate it hopefully down the line when you have it as a rental property.   

You've done the right math - figure out how long it would take you to recuperate the points after monthly savings.

So if in this deal you leave 5% that takes you 7 years to recuperate but investing in a 7% deal you are making an extra 2% year over year for the next 7 years.   

A couple weeks later our Oregon property closed we headed south for an adventure and recuperation from 4 years of non-stop remodeling on fix and flips.

As sad as the situation is, we still have bills to pay and you have money to recuperate.

The renovations were also self financed. 9 months after purchase we did a refi, recuperating our full cash investment, plus a profit, plus equity in the property, an appreciating asset, and positive monthly cash flow.