I live in LA, couldn't even consider a deal - too skinny to engage in any type of financial engineering.

I would get the Biggerpockets podcast on your phone or Ipod and just start at 1 and listen till you have caught up.  

However it seems like a skinny deal anyway since you will not even be doubling your money.

Here is the skinny on the one I just closed.MLS listing 44,900, acquired at full price no contingencyassessed value 63,0004 bed 1 bath built 19201286 Sq ft 4 bed 1 bathHardwood floors and oak moldings (unpainted throughout)New vinyl windows 2nd FloorNew tear off roof 1 yr old.New vinyl siding not very old.Off street parkingLocation is in the path of progress (less than 1 mile from Rochester's #1 employer)Screening tenants at 1200 / month, with current applicants.Pro forma:gross rent yearly = 14,400less 35% (10%PM, 10% Vacancy Reserve, 10% Capital Reserve, 5% Repair Reserve)= $9360minus operating costs (2246 taxes, 600 insurance) = 6514cash on all cash return = 14.5%

@Daniel Lipetzky@Matt Reed knows lease options and rehabs.Warning - Just because you CAN buy it on sub2 does not mean you SHOULD.You deal is too skinny for sub2.PITI vs Rent is less than 200.You may think you have 20K in equity but the costs to sell are 10% of 130K = 13K with commissions, closing costs, sellers concessions, etc.Look at a lease option assignment $850 rent - $130K option exercise price and flip it for $5000 in 10 hours.

@Bill G@Brian GibbonsOk then... here's the skinny.

This is a skinny deal I would sell and get out of it.

I assume you've verified the FHA rules, and the seller is permitted to contribute 5% to closing costs.It's a skinny deal as a staight rental.

Also, I'm not sure if laying the tile is tough since it is long and skinny.

They might do well for awhile, but rents will probably get pretty skinny in a ghost town.