But my assumption is that even that premium would still be below the inflated prices I'm seeing on the popular websites.

My assumption, and I could be wrong, is that the bank won't finance on these.Definitely get a walkthrough on all 8 houses. 

I tried to include all the pertinent information below:Rental Income: $13,200Rent: Currently has a tenant on one side at $550 per month without a lease – I’ve made it a condition of the sale that the tenant has either signed a new lease with my property management company or delivers that side vacant; other side is not rented out due to required rent ready repairs; rental comps in the area show between $550-600 (I’m being conservative and assuming $550).Expenses:Vacancy: 10% ($1,320)Property Management: 10% of gross rents ($1,188)Property Taxes: $2,065 ($905 for City of Memphis, $1,160 for Shelby County)Property Insurance: $450 per year Repairs and Maintenance Assumption: 2% of Property Value per year ($980 per year)Utilities: separately metered; all paid by tenant except for lawn mowing at $25 once a month for $300Advertising: 6% (roughly ½ of first month’s rent) $792 per yearDebt Service: Based on $49k purchase + repair price, 20% ($9.8k) down, 5% 30 year fixed is $2,525 per yearLocation:This is probably where most of my concern is coming from: Western edge of Hickory Hill, Memphis, 38115; major cross streets: just SW of Clarke Rd and Winchester RdAcquisition:Purchase Price: $42k, seller to pay closing costsRepairs: $7.5kTotal Acquisition Cost: $49.5kARV: Large range of comps in the area, best guess is $60kFinancial Metrics:Net Operating Income: $6,105Cap Rate: 12.33%Cash Flow: $3,580 per year, $298.33 per month, $149.17 per unit per monthCash-on-Cash Return: 36.5%Do you think it's a good deal?

nope, these two actually have the documented ability to make the payments at a reasonable debt-to-income ratio.I'm coming up with ballpark $345k/mo PITI (my homeowner's insurance assumption might not be accurate, I didn't pull the actual property tax bill, and I don't know if there is an HOA so I left it at $0).

This equals that 40% you mentioned.Future assumptions - what do most people put there?  

Here are a few thoughts and questions for you:Are you positive that a conventional lender will not loan on it, or is that an assumption (or maybe something you heard from another person)?

The selling market doesn't seem to be too strong in this neighborhood; this one has been listed for 60 days and other similar properties have been on the market a while.Craigslist rents validate my range of rent assumptions between 600-700.It sounds like the general consensus is this is not a home run deal at this price due to likely roof and HVAC costs.Any more feedback from others would be greatly appreciated!

Getting good rent comps is essential, especially if you are making assumptions that can make or break your financial model.  

Does anyone have a rec for a spreadsheet that shows the basics of P&L associated with a rental property, but also lets you input hold period and value appreciation assumptions so you can get a full picture of the IRR after a sale?  

My assumption is that individual landlords rather than management companies are more open to allowing STR.