Really there is no way to stop a buyer from doing this but there are measures one can take to prevent it in the first place.

A comparable dwelling unit:• Is constructed in accordance with the standards of chapter 4 of the 2006 International Energy Conservation Code as such Code (including supplements) was in effect on January 1, 2006,• Has air conditioners with a Seasonal Energy Efficiency Ratio (SEER) of 13, measured in accordance with 10 C.F.R. 430.23(m), and• Has heat pumps with a SEER of 13 and a Heating Seasonal Performance Factor (HSPF) of 7.7, measured in accordance with 10 C.F.R. 430.23(m).All of our AC and heating units are SEER rated 13 or higher, and I found the construction codes for the IECC chapter 4 and in reading them we appear to meet all of those requirements.

@J Scott Actually, I stopped short of saying IRR because that too is a rate of return measure and it won't work with zero investment.

Being on a hillside would kinda give me a warm and fuzzy, sorta.Alot of coulds, cans, mights, and shoulds, with a kinda and a sorta thrown in for good measure.

Marc very correctly pointed out that there are still a whole lot of people doing Lonnie deals so the idea they are dead would be incorrect when measured against that standard.

When this one started a number of measures were taken to try to stop the correction.

@Sean KuhnIf you put 12K of initial capital improvements into the property at purchase then I would include that amount in your initial capital cost (purchase + cost to put in service) and use that amount when calculating CAP, CoC, or any other measure of return.

Of course, if an opportunity to dispose of one of our properties, for a profit, arises out of plan, we would avail ourselves of the situation if it makes sense to so do ... there's always another property.We have taken measures to setup our property holdings such that they could be passed along to the next generation, while not irrevocably committing ourselves to that path.

Personally I like to have two or three options and I measure the risk for each one.

You should definitely check that out, Morgan.Another excellent book is Frank Gallinelli's What Every Real Estate Investor Needs to Know About Cash Flow...And 36 Other Key Financial Measures.