Add to that the REAL unemployment numbers in California are nearing 20% and you still have a lot of market weakness.

If you go with them you could ask for a double deposit because of their weak credit.

Most are older throughbacks to an era when HOAs for SFH developments were very weak.

REOs and short sales offer a chance of getting a good deal, but they're slow deals to close.If you're trying to buy a rental with little cash OR little income OR weak credit, you'll have a much tougher time.If you're wanting to rehab, then you have to look even harder to find a good deal.

Your only weakness with this scenario is going to be the short seasoning on the note and you didn't mention the credit rating of the payor.

There are plenty of condo projects that were built during the bubble that are experiencing very weak demand.

At the same time geopolitical forces (war with Iran and unstable middle east ) could cause further economic weakeness and uncertainty will cause a hold on any growth and more buying opportunity.

Don't ever be scared to drop the price -- it's not a sign of weakness, it's a sign of a smart business-person...

But again, there is plenty of things more to consider than just the price-to-rent ratio.I find the statistics quite interesting, I think the biggest weakness for this analysis procedure is scale of application.

Going by either the 50% expense rule or, the rents should be 2% of the purchase price rule, it is a weak if not bad deal.