I agree with @Jay Hinrichs.Be careful with any investor money, but ultra careful with friends and family money.

Ownership in places like that is more of a luxury (you can do all the interior decorating you wish) and less of a good financial decision.  

The street this house is on has all high end very luxurious homes.

The numbers (since these matter):List is 75k, numbers are based on selling price of 70kMedian rents for 3br in area: $1200, I'm factoring in $900 due to my cash flow to play it ultra safe because of the small size.Factoring in PM at 10%.Rent - Mortgage&Insurance - Tax - Vacancy (10%) - Repairs (10%) - PM (10%)900 - 310 - 225 - 90 - 90 - 90 = +95$900 is likely very on the safe side so I feel that this is a good deal. 

Hello BP Nation,For a small (8 homes) luxury development, would a fair ballpark percentage for soft costs be 18%?

Hello BP Nation,For a small (8 homes) luxury development, would a fair ballpark percentage for soft costs be 18%?

@Lisa Thoele  Its a fine line in the ultra competitive   west coast markets.When I speak at RIAs and other events in LA.. the first thing I ask is a show of hands from the audience who is a RE agent.. virtually every hand is raised.. then I ask Who is a Private lender and again nearly all the audience raises their hands.Its not quite that way here in Oregon.. but its still a very vibrant RE market..

However since you are on the lower side of comps, you can always use the peel and stick vinyl tiles/luxury vinyl.

I agree that my expenses could be refined above, and I have the hard numbers to support the cost associated with these units but I understood the 50% rule as being an ultra conservative metric that would cover CAPEX+Insurance, taxes, vacancies, etc...Also, the 100K is included in the loan payment but would likely not be financed, making the loan payment decrease.

As I become more knowledgeable my plan may change but as of now I am positioned for a buy and hold strategy.I am not opposed to investing outside of the state but am having a difficult time in finding the right area that is going to give me the best price-to-rent ratio.My long term goal would be to work for myself and allow me and my wife the luxury and blessing to stay home so we can raise our baby…hopefully another one on the way in the not so distant future =)My other long term goal would be to gain enough knowledge to become a major contributor to Biggerpockets.However, in the meantime I still I still have to work my 9 to 5 job for at least the next 5 years until I acquire the knowledge and network to be a full time REI.