-prices may drop quite substantially in a down market compared to properties in class A neighborhoods? 

So they got what they wanted which was a chunk of cash up front and I got what I wanted which was a good return on my invested capital.The seller had a recent appraisal on the building so I offered them a bit less than the appraised value and we worked out a rent that is comparable /sq ft to similar properties in town.The seller gave me yearly rental increases and I gave him the option to buy the property back from me any time during the 5 year lease term because that was important to him.One of those classic win-win deals.

It'll be our first deal, but we're excited about it and we'd be happy to compare notes.

We don't have a crystal ball to know that a tenant with no prior evictions and a solid job history would suddenly be laid-off and turn to alcohol and stop paying their rent.

I'm big on the numbers so everything I do will be compared to the opportunity cost of having the money in other assets like stocks.

A few days prior to the open house, take an open house postcard and walk 6-8 houses on either side of the house, and the 12 houses across the street. 

A friend of mine has two duplexes there and had no issues finding tenants when the prior ones decided to bounce.

Ex: Credit score 625 or above.Income 2 to 3 times the rentJob verificaton current paycheck for last 4 weeks.Occupancy,, limit occupancy in unit / house ,, the total number of people can't exceed that number.Criminal,, no felonies..Valid Social Security NumberNo CosignersRental verification from previous landlord.No prior evictionsSample list.. separate application for all people in apartment,, combined income must equal the 2 to 3 times the rent.. 

Compare that with the former owner's statement to you.  

@Charlie McClskie, The IRS does not like to see a taxpayer change anytime immediately prior to a sale.