If you do not want S8 find out what they are being paid and set your minimum income requirement high enough to exclude them.

P.s. give us some specific examples of tenant profiles that work for you vs what you are recently getting (excluding obvious unqualified ones.)my2c

@Anthony Michael Mugnaini it seems like the $103 is only including the principle and interest - excluding taxes, insurance, reserves, vacancies and other costs such as water, lawn care etc.  

Basic for would exclude much more than that and are often disguised (the agent's selling basic form hope you are more concerned about cost than coverage, and many RE investors fall into that trap).On a basic form you would lose Weight of Ice and Snow, Falling Objects, Water Damage (Think broken pipes), Collapse, Theft and Risk of any other direct physical loss not excluded on the special form policy. 

So the the 50% rule excludes capex?  

Kristine Marie PoePayment to the lender excludes taxes and insurance and is just the P+I of $321I pay taxes once a year in full and I paid homeowners insurance full for one year when I moved in.Because it was a foreclosure I had to pay the nonhomestead tax rate of $1200 which it will be when I rent it out but I will have a break of one year paying a homesteaded rate of $600 since our tax payment is due Oct 1 in my city and I will move out Aug 20th or so.

The lack of a bathtub excludes it from conventional financing from several big and small banks.  

The $500,000 tax-free exclusion would only exclude up to $500,000. 

However, if you are in a state like PA that offers properties at Upset Tax Sales (excluding Judicial & Repository Tax Sales)--where the mortagages, liens, etc. transfer to the successful Tax Sale Bidder, it might then be something that you want to explore---which again leads me to encourage you to seek the advice of a licensed Attorney-at-Law that Practices Tax Sales or Just Simply contact any one of the major Insurance Companies Direct and Ask them Directly----that is usually a Free Call, but you may want to ensure that you speak to someone that knows about insuring Properties acquired at Tax Sale.  

If they are close estimate an adjustment, if they are close you may want to exclude them.Then look at the lot - both in terms of size and desirability.