Now, not only you spend money on labour and material, but you also spend on partial demolition, labour and proper disposal (Those old houses have lots of nasty materials in them that you cannot just haul to the local dump site).

Bobby the real estate market cycles locally in every market.There are average times that this takes place.For example so long for the market to be stable,so long for the market to increase,and so long for the market to decrease until it hits rock bottom.The pluses right now are lots of motivated sellers in many markets.They held out for a few years thinking things will get better.Now they have accepted it will be a long haul and are ready to sell.Holding out for 2 or 3 years is one thing but 7 to 10 years is too long for many for a property to recover.The plus side is interest rates are low and pricing is great.The downside is liquid capital needed for a regular loan is steep as loan underwriting is tight.If you wait lending might relax with less down but interest rates might rise along with sellers expectations of selling price so you would be at a wash or worse then when purchasing now.The name of the game is too hold onto cash and leverage into a good deal.In the down cycle you buy up as much as possible.

A good deal can be found in what we call the Toy Towns in Memphis like Bartlett & Cordova and so on...

Hi Mike,I understand what you are saying but the 50% rule is based on holding property for the LONG haul, not just the here anad now.

Someone (probably ex tenant) kicked in 4 of the interior doors, two big holes in the walls, cherry kool aid stains on carpet, dead lawn, cut some wires in the walls, NEVER cleaned the kitchen and looks like used lard to cook everything, the cooktop looks like a couple of "smallish fires" may have happened and the (original, 1979) oven has NEVER BEEN CLEANED, oh and to top it off we have a family of THREE SKUNKS LIVING IN THE CRAWL SPACE.And of course I no longer live 6 miles from this place, I live 950 miles away.I just spent 1 1/2 weeks working on it, about 30 "contractor size" garbage bags, 5 gallons of paint, a million small things that you always run into.Anyway I found a "craigslist" cooktop and wall oven for pretty cheap, my wife helped a lot, even though she hates RE investing and my neighbor has been a godsend because the trash service only picks up the rolling dumpster, NOTHING ELSE, so he has hauled the other stuff to the dumpster at his work.I'm heading back to TX to hit the kitchen, exterior paint, front yard and finish the interior paint (oil base on the trim).

I guess thats a plus to starting early that because I won't have to make much money to be happy I would much rather live like an average dude out of college for 5 years and be set for the long haul real well.

Are you guys in it for the long haul together or are you looking to cash out re-fi in a year and pay him back?

I've toyed with this idea.    

Getting my business started is much more important to me than having toys so we are geared up to leaving the cards blank.

I recommend membership, but only if you intend to be in the business for the long haul.