BIG question. Im stuck

[Shawn Munoz]

Hey, there is a house that is for sale. There are currently long term tenants living in the house. The landlord is a good friend of mine and is willing to sell it to me with a huge discount. The only problem is i have no money to put down and would have to use a private lender with a 7% loan. 
after doing the math i would be making a profit of about $215 a month. My friend (the seller) is telling me that the appreciation is where i would make my money. Would any of you guys take a deal with this low of a return? The house appraises for 135K. He is selling to me for 110K

[Thomas S.]

It depends. On the surface positive cash flow of $215/month on a SFH is not bad but the bigger question is can you increase the profits at all. Likely hood is with long term tenants they may be paying below market. You may have to get new tenants as long term tenants can be a PITA.

There are however far more variables to consider. If you know how to properly analyse a rental property you should be able to come up with the answer yourself. If you do not you should not be investing in rentals. There is a great deal to learn about investing that needs to come first.

1) Investing is in income properties is risky regardless of what other may say

2) Education is the key to success

3) A $135,000 property is not going to have appreciation of any significant level.

4) Appreciation does not pay your bills