Extra 4 months of carrying costs are up most of the margin.

If any costs go up, developer eats it.

Given that the property was worth $390K in its current condition, I saw an opportunity to make the numbers work while keeping my upfront costs low.Instead of increasing my cash offer, I negotiated a $25K down payment with the seller carrying the balance for two years through owner financing.

It is always valuable to be able to walk into a property an analyze cost to repair, it is a huge factor in determining the feasability.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

In one of my markets assessments are performed every 3 years, and the cost of 3rd party appeals will cost 30% of 1 year savings. 

I have had investors pull equity from their homes in the phoenix area to buy cash flowing properties in Fayetteville and similar areas, because the price growth in the phoenix area generates amazing returns.It depends on if you want cashflow now or delayed gratification later.Keep in mind that when you do sell, there are costs to selling and depreciation recapture  and IRS taxes, which eat up most of your "equity" growth. 

You have to include the cost of your time and the work, especially on a "scary house" is daunting indeed. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

More work, more time but you can take advantage of a nice cost segregation / bonus depreciationThis is the truth!