I recognize that the CoC return is not as high as we'd like, but it does come with some built in equity (~$100,000)Details:- 3/2 Single family house (1487 sq ft) with a 1/1 ADU out back- Zipcode 78745- Purchase price: $469,900- Down payment: $50,000 plus CC (includes assignment fee)- Seller Finance $419,900 at 3.5% interest; 30 year amortization with a 15 year balloon- PITI $2744.02- Rental comps: $2667 for the 3/2; $1505 for the 1/1 - LTR according to BP (Total $4172)- Repairs needed - minimal, coat of paint and maybe swapping a window unit A/C for a mini split

Just recognize the rate would most likely be in the double digits, especially if the portfolio loan is not in first position.

And its only got 2 bedrooms and 1300 sq ft whereas 3 bedrooms from 1300 to 1600 sq ft tends to be the sweet spot for families.I'd knock it down to 1650 to get down to where quite a few sfh's with 3 bedrooms are listed at out there and eat the 200/mo.   

One thing you might consider if it works for you is buying a hack and living in one of the bedrooms or use that as your permanent address for a year, until you get it up and running and then do it again...and again...until you tap out on time to manage. 

For example, I am a little concerned about some aspects of the business cycle recovery and a potential for a double-dip so I lean toward the safest part of capital stack which is debt (or low-debt equity).

On the "bedroom" side of any nearby interstate.  

I usually suggest to my clients the equivalent of 3 months’ rent held in escrow and double the daily rent rate to be charged in the rent-back agreement starting after agreed upon move-out date if they are not out, with seller maintaining all utilities and repairs on appliances and systems until move out, especially if you’re planning to renovate, anyway.

Since they did not want to disclose how much they were making in the deal they opted for a double closing. 

The current version of the ATCP you are violating is ATCP 134.08(4), which prohibits the same exact thing as 704.44(4m) prohibits…the kicker being that the ATCP (the consumer protection act) comes with the added penalty of you being charged double damages and actual attorney fees because the act itself is promogulated under Wis.

If you buy an outdated smaller 2bd/1ba home for $150,000 in an area where remodeled 3bd/2ba homes are selling for $300,000, and you know it will cost $50,000 to update the home and add an extra bedroom and bathroom, you can be relatively sure you will be able to recoup your investment.