Normally the math works in any state but the exact process might not.

Getting on base rather than a grand slam the first time at bat could be an analogy.Do your homework on each deal and then recheck the details.

Lots of folks with really poor deals seem to prey on newbies with fast talk and loose math.

If you have done your homework and truly have positive cash flow, you should be making more money as you add more properties.

Regarding J Scott's comments... true, but there are banks out there with enough capital if you do your homework and adjust your business to match the lender's underwriting standards.

For cash-on-cash return, you indicate:Cash on Cash Return: $811/$14,000 = 17.2%But, $811/$14,000 is actually closer to 6%.Not nearly as good a deal at that point -- though that still assumes a 15 year loan.Other than the incorrect math, the biggest concern I would have is how much it would cost to get the property into rental shape, meaning the cost of deferred maintenance, turnover and general upkeep.

Are they allowed to do this as I see within the last 6 months properties are selling in the area 190000+.I did the math and If I were to do this deal with hard money it will require almost $30000 during the life of the project.

And one of my favorites, define "Equitable Interest":I could go on all night and ALL of this is basic real estate, I didn't even ask a math question, that would fry brain cells.

@Chris Vail Sounds like you really did your homework.

So, buying a non conforming unit may present positive opportunities if one's homework has been done and you are going in with eyes open.