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I'm just trying to figure out what you want to do. You want $50K. You say the financing guy got you an "80-10-10" loan, but it sounds like what you want to do is have the buyer put 10% down, you carry 10% as a second, and the bank does the other 80%, is that right? So it would be:

Buyer: $5K down
Bank: $40K loan
You: $5K second

But, you don't want to carry a second, so you want to up the price to $55K, so that the numbers become:

Buyer: $5.5K
Bank: $44K
You: $5.5K second

But you forgive the $5.5K and just walk away with $49.5K. Is that the scenario? Forgive me if I'm slow, but if the above is correct I'm just confused because I don't see what the financing guy got you besides an 80% loan.

I don't have any clue about the legality of any of this, but I thought maybe if I'm confused others would be too and you might get a response if it were clarified.

The info is kept by the county most of the time. Many of them have the data available online, but you generally need to find the site for the state and/or county where the property is. Where is it?

Let's just hope the spam bots come, eat up that email address, and flood it with offers for discount pharmaceuticals and the like.

Where are you getting that there is "high unemployment?" Nationwide unemployment is very low, many places are at an all-time low:

Utah: http://www.sltrib.com/ci_4661371 ("Joblessness in Utah is at a record-low 2.5 percent, statistically equating to full employment for the state. ")

Illinois: http://www.reviewatlas.com/articles/2006/11/17/news/local/news1.txt ("Illinois' unemployment rate dropping to match its lowest level on record...")

Hawaii: http://starbulletin.com/2006/11/23/business/story01.html ("Hawaii's employers will continue to struggle to find employees, given that the state's seasonally adjusted jobless rate plunged to an all-time low of 2.1 percent in October.")

To list a few.

There are a couple other pros to the cash side of things that often get overlooked. First, in the example given, it is assumed that all of the houses are equally good deals. In reality, some are likely better than others. The cash buyer will presumably choose the two best of the lot. Also, if you are like me and like to work on the houses yourself, more of the fix-up costs will be saved. I can paint two houses a year, but 20 gets to be a bit much, so I'd have to hire most of those jobs out. And, as far as management goes, with two houses I would handle all the management myself, but with 20 I'd definitely need to hire a management firm (the good news, though, is that with 20 units I could get a decent deal!)

On the vacancy side of things, having 20 units is better than 2, though, because the risk is less. With 20, things will likely average out and you are more likely to hit the "average" vacancy rate (which can be predicted). With only 2 units, you may luck out and be lower, or go the other way and be much higher.

Like most things, the answer is probably in the middle somewhere. I tend to err on the side of under-leveraged, but too much of anything can be bad. Too many people get so "leveraged" that if one tenant doesn't pay or if there is a large unexpected expense, it can trigger a chain reaction that can put multiple properties at risk of foreclosure.

An excellent example of what happens when you over leverage.

This story won't be any help to you, but... A couple of months ago, I found an REO I was interested in. My Realtor set up a time the next day for us to go look at it. A few hours before we were supposed to be there, the listing agent called him and said the bank just decided to take an offer they got 4 weeks ago and had been sitting on. They didn't even care that there might be another buyer. On the other hand, the last REO I bought, the bank made its counter offer the day after I submitted, and later the same afternoon we had gone back and forth two times with counters and agreed upon a price. So I guess there's just no telling. I would recommend putting expirations into your offers if you don't want to get stuck in this kind of waiting game.

What about vacancies? You can factor in an estimate, but what if it's higher than that? What if it sits vacant for two months and you are forced to lower the rent to get a tenant?

Also, that appreciation rate may be a little high, especially if any of the deals are multi-units. I always like to be very conservative with my appreciation estimates. In the first couple of years the appreciation is pretty meaningless anyway.

Some groups like to get together to play the Cashflow game. I've never done it, but if you're looking to start by informally getting a handful of investors together, it's something you could think about. Once you have a small group of regulars who know each other, it might be easier to get more formal, educational-type meetings going and attract more attendees.

Can they really come after you if they don't catch you in the act of hanging up the signs? I just have this vision of a spiteful real estate investor posting his competitor's signs to get the other guy into trouble.