Bad deals need some "tax benefits" lipstick slapped on them to make them look better.If you're truly interested in a profitable rental, there are lots of places where you can get these.

Property is purcahsed at say 15K, 4K in rehab and lipstick, RTO put in place at say 40K and sold to investor at 30K, where the emphasis is placed on the RTO deal and cash flow being purchased instead of the real MV of probably 25K.

Sure as h*** not 38%.If you have to slap some "tax benefit" lipstick on a pig, just realize its still a pig.

This is a bad deal, and some creative lipstick won't make it work.If this is the best you can do in this area, you shouldn't invest in rentals there.

In between it phases out.The "tax advantages" of rental real estate are often used to put some lipstick on a pig of a deal.

Craig-These are good starter rehab homes, because they are basically "lipstick" rehabs and do not require much more than carpet, paint, fixtures, etc.You do not see big margins on them, but you should be able to burn and turn and make your money with volume.

There are so many home in memphis that are 40 to 50 cents on a dollar that just need lipstick.

Changing the counters, or sink (farm sinks get scratched up easily on the front when people are wearing belts) would be like putting lipstick on a pig.

Most owner occupied homeowners do not want a major project, so the lipstick and mascara rehabs go fast.Also, Fannie and freddie will actually rehab some of the properties (to a slight degree) in order to sell to owner-occupants.Lastly, if an easy rehab gets listed, there are a ton of agents sharking the MLS for light rehabs.

If the improvements are cheaper and what you find in a rental you might have to put a bunch into the property to sell it diminishing your returns or reduce your price substantially.The number one problem I see hands down is putting the wrong tenant in and not setting up the lease correctly.I am amazed by some landlords on how they qualify tenants and run there business.They don't qualify tenants and then the property gets run down and rather than fix it up again the landlord puts lipstick on it and reduces rent some to get another shady tenant in and they are out in a few months.Your property then starts to cycle down in condition and tenant quality in a spiral.