Many “wholesalers” get all excited when getting a property under contract only to discover that a thorough inspection by a knowledgable professional results in repair costs 2 - 3 times higher than they calculated. 

No building inspections or permits exist out there.

Quote from @Jeffrey Bourque: Hello All, I am new and this is my first attempt at purchasing a property with the intent to create monthly cash flow.The property: Triplex Listed at $140,000 - Total monthly rent income $2,150 - Tenants want to stay and are all willing to sign new leases for 3 years - 8 beds 5 baths and 3,500sqft livable space on a 4,800sqft lot - Heat and electric paid by tenants and water trash paid by owner $180 month - I have managed to talk the selling price down to $105,000 with a kick of $10,000 for closing and commissions so $115,000 all in - Building is in fairly good shape according to pictures and questions but have not done a inspection yet - some general maintenance repairs are needed according to the seller but nothing that seems to bother the tenants. - Taxes are on the higher side at $6,000 yearMy Numbers: $115,000 putting 20% of my money $23,000 and finance the rest with total expense of $1,834Monthly expense numbers: Future Maintenance 13% $273 - Vacancy 5% $105 - Property Insurance 5% $105 - Property Taxes 23% $500 - Property management 10% $215 - Office/Travel/Legal 4% $84 - Mortgage 26% $552 - Monthly Cash Flow - $316 per month or $3,792 per year so Cash on Cash = 17%I think this looks like it is a deal worth doing and I also believe I can bump the total rent up by $50 each tenant which I think make it even better.

For example, State Farm typically requires the latest inspection report for underwriting on multi-family properties that are over 30 years old.

Just make sure to fully understand the loan terms, especially the interest rate and repayment schedule, so there are no surprises.2.Condition of the Property: If the property isn’t in really rough shape and you were able to get insurance on it using a 4-point inspection and wind mitigation, you might even qualify for traditional funding options like FHA, Conventinal, VA, a cash-out refinance or a home equity line of credit (HELOC).

I lost another $1000 in inspection fees but should get back $2000 earnest money deposit.

I have already spent a good 6-8 hours on the phone trying to coordinate with the seller, lender, appraisals, 1031 company, PM, inspection, etc. and I don't EVEN OWN THE PROPERTIES YET.Single family rentals are not scalable.

Of course, this is all done before we spend money on inspections, etc.It's all about the relationship you develop with the team on the ground.

Inspections would have prevented this debacle.

If you're going to do it alone, make sure you your due diligence: estoppels, inspection, review, consult with a local attorney familiar with the local regulations, etc. and good luck.