Hi, I was wondering if anyone could shed more light into how much it would cost to change a garage into a mother in law suite with a little kitchen and bathroom. .

A 3rd floor balcony is nothing to take lightly, from a safety perspective.

Those tenants are a lot less likely to call the landlord every time a light bulb burns out than a white collar office worker is.  

It was an interesting first walk through you could see the sky through the bathroom ceiling and not because there was a sky light!

Are you surprised that the product they are selling is presented in a favorable light?

Bursting pipes could be a tell-tail sign of other issues and shouldn't be handled lightly in my opinion.Ok..back to the Numbers of this Deal.ARV: $90,000Proposed Market Rent: $775/mth (Also using a Vacancy Rate of 8% to derive EGI)EGI: ~$713/mthP.P. $49,000 financed at your rate and amort of 5%/30 (I'm pretty sure this rate is a little off unless you are putting down at least 20%..but let's run with it)Mortgage: $263/mthTaxes: Estimated at $94/mth (1.25%)Insurance: Estimated at $55/mth (in OH if that's where this deal is of course)Management: 8-10% EGI ~$71/mth (even if Self-Managed should still factor in)Maintenance/Reserve Account (1% Value) ~$75/mthEstimated NOI (Assuming Tenant pays all utilities): ~$418/mth - PP=10.24CAP@$49k or 7.17CAP@$70kEstimated CashFlow: $155/mth (DSCR ~1.59 which is good IF your Loan Assumption is accurate)IF you can get this property, with a clean bill of health, for $49,000 and IF the property valuates at $90,000 and IF you can secure a loan for the $49k at 5% Interest with a 30yr Amortization with only the information you provided and general assumptions, it looks like a potential deal as far as numbers are concerned. 

The Silicon Valley DOT BOMB explosion was precisely on the issue that year-on-year there were no earnings and the venture capital investors saw no light at the end of the road and called in their ante.Personally, I evaluate the Cash Flow as my sole discriminant for purchase.

Another way to evaluate is to simply drive around, see if stores are coming in, if street lights are being put up etc.  

The wiring originally installed that house was designed to run a few light bulbs and perhaps a radio or two (it's not uncommon to find a single circuit per floor or only 2-4 for the entire house) and not to handle today's array of electronics.The house of that vintage, the presence of asbestos in its many forms (pipe and duct wrap for the heating system, possibly mixed in plaster, floor tiles, exterior siding, etc) is a distinct possibility.Where I do not have experience is in local insect damage - I know you have termites and undoubtedly carpenter ants (or a close relation).  

Can anybody shed some light on how to get financing on an investment property for new construction?