The seller is a client of one of my contractors and my contractor tells me, that the seller is motivated (just suffered from a stroke, and has some other health issues) and is looking to get out of the real estate game.I haven't met the seller yet, but I have been by his property, and it has HUGE potential.

With all due respect, my experience tell me that ole Samson Kay suffers from the old BS Factor.

If that is a property you can hold for some time and suffer through it in the beginning it could be a better deal for you years in the future.

If you're just talking about $200K, though, you better just suffer through the hassles of deeds of trust and lien releases.

Hence, you could have the greatest income producing asset but if your comps are not good, your property will suffer from lower valuation. 

@John LeavelleRight, my plan was to satisfy the one year requirement and then move to a different space and rent the unit I was living in. but good point again: in the first year, the cash flow would suffer. 

For e.g. if there your tenants get laid off or your sub-market suffers from employment issues, your rental income will go down, your NOI and hence, property value will go down.In the case of a lender-driven downturn, especially in a particular sub-market, where the credit markets freeze up (even for a short period of time), again your property will suffer (regardless of how great of a cash flow machine it is).

He eventually sold the property but it took longer than he hoped for (in part because he needed to get top dollar) and therefore had higher holding costs than anticipated.I suspect he suffered a small loss on this investment (maybe he broke even) in terms of financial but when you add in all the effort exerted and lost opportunities the loss was more substantial.So determine early what limits there are due to other regulations (setbacks, parking, etc.) before investing significant time and money.Good luck

As word gets out on them, they get busier and their quality or customer service suffers or they are forced to raise prices so they don't get overbooked.

Frustrating but I was willing to suffer for the savings.When my company started to expand, I looked into Vonage's business lines and, guess what?