I totally agree that if you put in the money up front to get the best tenant in the area it will pay off in less residual *** pain.

Whoops we didn't put in management, Well you can pay more for insurance if you want, my nephew does the HVAC, my wife does the books, oh that 120,000 in income other that is from fines and maintenance bill backs(seriously).Like I said, we are going into an 11 Cap now, but that is the exception and I won't hold my breath for the next one."

@John HornerIf you want to get technical bird dogging is illegal if you get any compensation.Pretty sure it would be considered practicing real estate without a license and any agreement you put in place will just be knowingly trying to circumvent that fact.So if you ever took a bird dog fee your best bet is to turn yourself in to the local authorities and plead mercy by the court.

:)On behalf of the contractor who's doing the deal, presuming he's seasoned, serious, dedicated, and driven: Hey all you advice givers, the very LAST thing this contractor and for that matter any of us hands on flippers want/need/or have time for is a nervous first time workmen's comp accident magnet investor following us around on the job site day in and day out, distracting our focus and interrupting our daily project management.

Too easy to get distracted and miss something important!

got a quick update for you guys.Had to put in a new furnace, central AC, and hot water heater.

This is the sort of property that you would have to go to 50% LTV to get financed and someone with $100K to put in the property can likely find a more solid property at a higher leverage with that $100K to invest.

Larthsa,To figure cash flow, you list all of the monthly expenses, Principal and interest, taxes and insurance, add in any utilities, HOA fees, etc,,,then you need to figure out a fair figure for "reserves', this is a hold back amount for the hot water heater breaking etc,,,then figure in a percentage for vacancy (most will use around 5% if its easy to lease) if your going to have a management company manage, their fees,,then add,,,take the final figure and take it from your monthly rent, and you SHOULD have your cash flow (if I missed anything anyone please chime ini)If you want to figure your "cash on cash" return, figure out how much you will end up in the deal for in cash (deposit, rehab, closing cost paid in cash etc, all expenses you will pay in cash), thats your total "cash" in the deal,,now see what your annual cash flow from the property should be, divide that by the cash you have in the deal, and you should have your cash on cash.You can do this with a simple spreadsheet, it makes it very easy to look at deals, but remember, these numbers are only right IF the estimates you put in are right,,,including the anticipated rent,,too many new investors tend to under estimate expenses and over estimate rent.andy

I'll share my experience with water issues:I have a "stream" on my property...it's really a drainage ditch put in 75 years ago.

Thanks @Steven Hamilton II , I appreciate the detail.I am currently marketing for motivated sellers and wholesaling the properties that I put in contract.My future goals are to keep as many rental as possible.