Based on local comps, the ARV of the property is $120,000 and you negotiate a purchase price of around $75,000, including closing costs (this isn't unreasonable for a typical REO).

If your risk is low, a smaller return isn't unreasonable.

I've never heard of such a thing but not wanting to offend anyone I let it lie.I didn't think that my offer was that unreasonable but what do I know about current market conditions eh?

And any hurdles the city or other agency may through in the way of rebuilding.You need to figure out what it will really cost to fix it up, if the exit strategy is fix-and-flip.If the exit strategy is rental, what are the rents.

We'll see about that though.Another hurdle I see is once I do obtain my first job (hopefully in commercial real estate), trying to balance my job with a REI business may not be feasible.

What's so unreasonable about an adjustment to 8%?

This was the first time working with the City of San Francisco for a permit and I now have completed that hurdle and have more understanding of "normal" procedures.

It is just a bit of a touchy subject since it is all going to fall on the tax payers to make up those loses.Originally posted by Jason F:...If it's a matter of risking other properties, ...Jason, he risked all those other properties by the way he bought them using a LOC he KNEW was based on unreasonable values.

But, I a movie quote (from Apollo 13) I find myself saying when there is a big hurdle to overcome is, "Let's work the problem people."

That is not unreasonable for residential in some areas, but sometimes and agent gets a feel of what will fly and what will not.