There's enough meat on this one that I think it'll be a good deal even with all that stuff factored in.

If they are making a good living and visible tats are not a factor in their workplace, not sure why it matters.

Another factor that I forgot is that I can borrow $1M at 3.7% interest rate, not 5.25%.Personally, I'm not a fan of buying $25k/door that gets $500/month in rent because the maintenance alone will kill your cashflow.

The way I work it is not to tell them it's a low-value property, but to tell them that based on these and these factors (comps, repairs, liens, etc) I could do ___this price.

Many factors play into determining value, not many comps would have such a facility, the style as adapted to the home is considered, the functional utility as a residence may be less as well.I'd first call your zoning people and see if 5 or 6 kids requires a zoning variance.Having daycare services or other business activities in a residence is possible with conventional loans, but you can cross the line depending on the perceived liabilities of a business, any significant modifications to a property, public access and other aspects can cause financing issues.

Our seller had not been real on the ball when it came to raising rents over the last several years.Increased rents is something you can factor into your analysis.

Another factor would be the amount of debt that there is on the portfolio.

The two most important rules of being a husband...The wife is always right.If you ever think the wife is wrong, see rule number 1.Seriously though, it does depend on a number of factors.

There is an ongoing thread about day care at a rental:https://www.biggerpockets.com/forums/52/topics/109391-advice-needed-residential-tenant-w-a-daycare-insurance-headache-helpI didn't want to hijack it but I thought a more generalized discussion would be helpful to me and a few others.I also made it a point to tell applicants I do not wish to conduct business at my propertyHowever there are some gray areas, and I basically made my rules looking at the nuisance factors...not so much liabilities, and now looking at that thread, I may have to rethink this.You see, I would not have allowed the day care simply because a half dozen moms picking up and dropping off at the same time would cause a parking jam and inconvenience.On the other hand, I have told tenants who occasionally allow "friends" to drop off a kid for them to babysit its ok.

Figure $2500 in costs, and you pay off your existing $80K loan (yes, its paid down a tiny bit) and you'll net $22.5K (plus that bit of paydown.)