A high cap rate could be the result of a relatively high net operating income or a relatively low purchase price or a combination of both...

@Josiah Halverson I don't know the ins and outs of how those guys you mentioned operate but this has been my assumption.

One which has provided me the opportunity to successfully operate my contracting and property managment businesses for the past twenty some odd years.

Or NOI could be understated due to capital expenditures being reported as operating expenses.

All of this is negotiated and spelled out in your operating agreement your attorney sets up.Expectations have to be clearly defined and agreed to UPFRONT as equitable for all involved.

Pre-foreclosure is the niche I want to learn and operate in but it appears that I still have much to learn.

Next, I can tell you that other RE professionals, closing agents, attorneys, appraisers or any other who operates under any license to work in RE will have similar views.

Real estate Operators need management and maintenance people.

.) - 75 Expenses $820 (I did not include utilities because normally tenants pay for that, but find out what is common in your area.Net Operating Income NOI (Income - Expenses) = $680Cash Flow: $680 - $1134 debt service = -454 You will not cash flow on this property, even if you get $1600 for rent and self manage, so this option is a no go.

Buying discounted notes would get you there and be more sustainable, again, UNLESS you build and operate a hard money lending business (which can be sustainable), but less passive.