I've seen it in my own underwriting--with my ultra-pessimistic assumptions built into my model, I'm seeing a 20% to 25% haircut on pricing which means that a 4.5% cap rate is now closer to a 5.5% cap rate and might creep up even higher. 

This is My plan as a noob investor. Feel free to give me feed back PLEASE . I dont have a mentor and dont really have a guideline so based of myself knowledge and research. 1. Print contracts 1a. Purchase &sale of...

PercyRegarding his aversion to debt, he shared a few horror story situations that his father and uncle got caught in and as a result has chosen to play it ultra safe. 

For example, we went ultra cheap on a sub and he was doing very poor drywall work (makes sense).We had to find someone else mid job.

I was thinking of this..https://www.lumberliquidators.com/ll/c/Golden-Teak-Luxury-Vinyl-Plank-Flooring-Lifetime-Warranty-Tranquility-Ultra-5GT-T/10044289SKU: 10044289

I'm ultra-conservative, so, depending on your risk tolerance, you might reach a different conclusion, but it looks good to me.

I agree with @Jay Hinrichs.Be careful with any investor money, but ultra careful with friends and family money.

The numbers (since these matter):List is 75k, numbers are based on selling price of 70kMedian rents for 3br in area: $1200, I'm factoring in $900 due to my cash flow to play it ultra safe because of the small size.Factoring in PM at 10%.Rent - Mortgage&Insurance - Tax - Vacancy (10%) - Repairs (10%) - PM (10%)900 - 310 - 225 - 90 - 90 - 90 = +95$900 is likely very on the safe side so I feel that this is a good deal. 

@Lisa Thoele  Its a fine line in the ultra competitive   west coast markets.When I speak at RIAs and other events in LA.. the first thing I ask is a show of hands from the audience who is a RE agent.. virtually every hand is raised.. then I ask Who is a Private lender and again nearly all the audience raises their hands.Its not quite that way here in Oregon.. but its still a very vibrant RE market..

I agree that my expenses could be refined above, and I have the hard numbers to support the cost associated with these units but I understood the 50% rule as being an ultra conservative metric that would cover CAPEX+Insurance, taxes, vacancies, etc...Also, the 100K is included in the loan payment but would likely not be financed, making the loan payment decrease.