Was I MISLED?!?! Or does it still make sense to keep going???

[Joe Ward]

Tell me what you guys think. I met a guy who runs a kind of one stop shop for investers to buy, rehab and rent/hold single family homes. They:
-Find the houses
-Put together a report of what it costs me to buy and, what it will cost to rehab, what it will appraise at after rehabbed, what your new loan will be, what it will rent for and what your cash flow will be.
-They rehab and GC the projects
-They have tennant leasing to screen/rent it (first months rent is fee)
-They have banking connections if needed
-They will manage if needed for $75 a house per month (which I'm not doing at first)

Anyways seems like a good plan for a starter as they kind of handle everything. So here's my first deal.. Buy for $63,000 (cash) rehab for about $17,000 and they had the after rehab appraisal at $135,000, and said it will rent for $1250 a month. Then I would be able to get an 80% loan on the $135,000 and acually cash out on the deal. So I'm expecting to pull my 80k back out along with an additional 20K or so and still have equity in the property and still be able to cash flow a little while holding for future apreciation. Not a bad deal. And I had the banker ready to do the 80% to appraisal value loan as well. So basically here is where I'm at, rehab is done with the correct amount spent, renter is signing the lease for $1250 a month but here's where the problem is. It only appraised at $105,000. Which means the house is still appraising for more than I put in, say $82,500 in to $105,000 appraisal value, and I can still cash flow alright but it's not nearly as good as I was told it was going to be. I can't pull any additional money out of it, but I will be able to pull out 100% of what I put in at least. So basically for the time I have put in (which really wasn't much since they kind of did most of it) and no actual money left in the property since I will pull it back out. Basically with annual rental income of $15,000 and annual PITI of $10,800 less say one month of rent to be safe -1250 comes out to $3000 less another say $500 of misc. BS, I figure $2500 annual net cash flow to basically just be a landlord with none of my actual money in the property. As well as any principal pay down, and then of course taking advantage of a low market, and how much it will be worth in 10 years. Does this seem like a good investment to you guys to keep going? The only thing that really didn't go as planned was the $25,000 less appraised value I was banking on. This one is done so you can see it in black and white where it stands and they want me to jump on the next one which should be just about the same thing. I just like to hear your guys thoughts. I really like this guy but wonder if I need to start doing my own work to find the houses for closer to $50,000 myself in order for it to work better, but then lose all their support systems. What would you guys do if you were me???? THANK YOU IN ADVANCE!