It may catch up but highly unlikely he goes to jail.

Most MLS purchases at high leverage indicated by those numbers have initial negative cash flow.  

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

If you are getting a true turnkey home that hit's the 1% rule there's a very high probability you are in a more challenged area where the residents aren't as consistent over time. 

This was perfect to save a lot of money while maintaining a high standard of living.

@Keonhee ChoThe Austin area presents challenges in finding properties that cash flow, especially with BRRRR, due to high property prices and rising rehab costs.

48224 is pretty good zip code $100,000 as your total all in investment just to make $1,000 is a little high.

Borowing an EMD is super high risk and lending to someone who can't put come up with an EMD is also high risk.

I highly recommend you read it closely and develop your process.

Vacancy is often around 5%, particularly in high-demand markets, though this can vary by location.