@Michael Lauther & @James Vermillion I am rather cheap by nature so I don't want to give away 8-11% of my profit margin for someone to manage rentals that have had long term renters in them.

Hard money definitly imposes more risk and eat up a siginficant portion of the margin, but are necessary if you don't have enough cash.

In either event, it produces the same result...not enough margin.

I think more of what you are asking is how the occupancy level and accuracy will affect what kind of loan you can get and how much you will put down and how much the debt service will be.A regular lender at 90% occupied maybe 6.5% fixed at 75% ltv.If you get into value add deals you will pay points and a much higher rate to fund and lower LTV.You will then need to refi after stabilizing about 1 year out.So you build the carrying costs into the amount of time needed.The books will determine the verified income and actual costs.From there you run your desired cap going in and that tells you around the price you want to pay.Now if the books are out of normal standard margins you have to ask yourself why that is (deferred maintenance,undisclosed credits to tenants,disguising fees paid to themselves in other line items,etc.)

Also, did you know that the 823,000 number has a margin of error of ....400,000?

I got hit hard by one once and it wiped out the entire profit margin.

Keep it for a while until the smoke clears and realize your profit another day, or just keep it.Jeff, what makes you think the agent has 160k, or would even want to do that deal. 160k in and reselling it for 185k is a pretty slim margin after closing costs the next go around.

Kevin if you bought a "cheap" house and are selling without spending any money on repairs, I would certainly build in the cost of closing fees into the profit margin and not look for ways to cut corners.

Though the stock market allows margins RE has no margin calls so the two are hard to compare.A bigger issues arises that gets more to the heart of the matter.People are generally specialists when it comes to how they make money.

Depending on exactly WHAT repairs are needed...I have seen many owners buy a property in marginal condition, then do "just enough" to get by and rent it out so they get the cash flow started.