So, give them money to move.Bought for $157,100.38 ****** ARV$245,000.005 bed 3 bath – Phoenix AZThese are the numbers from the HUD statementBought for $157,100.38 ****ARV$245,000.00Existing Loan Amt Payoff $118,145.37*Subject To$118,145.37****Closing Costs From HUDTitle$1,045.00Escrow$1,400.00County Taxes$538.38Recording Fee$120.00Cash to seller$10,000.00Misc other charges$525.00Total Amount Due $$13,628.38***Arrears To Bring Account DueTotal Number of Missed Payments:11Total Payment Amount$10,095.47Unpaid Late Charges$146.84Additional Amounts:Foreclosure Fee/Cost$354.19Unpaid Advance Bal$1,101.75Total Amount Due $$11,698.25***FHA Loan Mod 2nd$11,582.44***My Out of Pocket$36,909.07***Total Cost Basis of Purchase$155,054.44ARV (After Repair Value)$245,000.00Repairs Post Purchase$ 5,000.00 +/-Unrealized Profit$84,945.56***Equity (ARV minus Subject To payoff)$126,854.63***I strongly recommend having 3 months reserves as follows:Monthly Mortgage$917.77(Taxes included)Electric Monthly$362.21Water & Sewer Monthly$102.80HOA – None$0Reserves3 months mortgage payments @ $917.77 per month = $2,753.313 months Electric payments @ $362.21 per month = $1,086.633 months Water payments @ $102.80 per month = $ 308.40 Minmum Reserves Total $4,148.34Then I turned around and sold it on a Lease Option for $265,000 getting $20,000 down on a nonrefundable Option fee, and rent of $1,900 a month.

Creative Financing
Did you know you can buy properties without using a bank?
You can use a variety of Creative Financing such as a WRAP.
WRAP – A wraparound mortgage "wraps" around the seller's existing mortgage, m...

Quote from @Marc Shin: Hello - i need some assistance with analyzing some numbers on an STR in terms of revenues / profits.

Profit margins on house flips hit their lowest point since 2008, with the typical flip now generating a 25.1% gross ROI while median purchase prices reached an all-time high of $259,700.

We built our current home with my husband being the GC and are interested in potentially building to sell, but am not sure about capital gains and other fees etc that would prevent us from making a profit from it.

And, since you'd only be renting out rooms in the main living area, it would still all count as your primary residence sale - $250K of profit tax-free, and no need to do a 1031 exchange.If you were going to have more than the max in tax-free profit, or maybe build an ADU or something like that, you could separate the rented areas out and even depreciate them for tax purposes.

House flipping is taxed as non-passive income, meaning profits are subject to ordinary income and self-employment tax.

The IRS treats it as a business so profits are subject to both income tax and self-employment tax.

Sale for profit of $200,000 or less as fast as possible. 

For those actively flipping, this can turn a solid deal into a stressful one fast.I’m curious: what are your go-to strategies to keep rehab costs predictable and profits steady?