Let's be pretty aggressive with our underwriting costs and assume:$200 / month taxes$45 / month vacancy (@ 5%)$150 / month CAPEX & Maintenance - its a fresh rehab (unless you're spending $20k on lipstick)$75 / month insurance$135 / month PM (@15%, which is high.)So expenses are $605 / month.

There are no shortage of lipsticked pig properties out there, and learning to spot them is essential for successful RE investing...we're all susceptible to "shiny object syndrome", but being aware of it is the first step to avoiding it!

Lipstick reno?

I'd be putting 5% down for an owner occupied loan and do a lipstick type remodel plus the ADU conversion and target a 750-775k reappraisal.Somewhere along the way, I was approached by a friend with an opportunity to buy his rental in Spokane (5 hours across the state) off market for a pretty good deal (155k).

My advice would be to buy a duplex or 4 plex that needs some lipstick and learn how to add value and manage a property.

If you can find the deals you should be able to buy at a discount and put some lipstick on them.

Hired a recommended contractor in the area to apply lipstick to the property and improve functionality.

If a house just needs a lipstick fix, my offer will be more.If the house has a crumbling foundation, it doesn't matter if the calculated cost of repairs is "X", you will have a lower buyers pool, because everyone is terrified of crumbling foundation issues no matter if it is "fixed".  9YOU say it is fixed.. but who knows if you, the flipper, actually fixed it the right way.)The list goes on.

If we tried to list it on the market, realtor thinks he can “slap some lipstick on a pig” and list it for just under $300k, maybe get a little bidding war mostly because of the lot size, but it  would require a big trash out and at least minimal cosmetic touch up (estimated cost of ~$10k for trash out alone).  7.

There are no shortage of lipsticked pig properties out there, and learning to spot them is essential for successful RE investing...we're all susceptible to "shiny object syndrome", but being aware of it is the first step to avoiding it!