If they tell you that they planned on staying, then issue them the proper notice for non-renewal.

However you need to consider; is the framing and HVAC done properly?

I'm a huge fan of debt, properly used. 25% isn't sustainable.

For Investments you want to balance equity and leverage.

Refinance at the start of Year 2; $185k ARV * .7 = $129,500 - $50k balloon = $79,500 + $12,744 [cash flow from rent with new mortgage] = $92,244 cash flow Year 2Sell in Year 5; less the balance due on the amortization schedule $121,909 = $63,091 cash flow Year 5The present value is now $135k which means that if I put in $140k at the start ($80k purchase price + $60k rehab costs) I overpaid by $5k.I realize there are a lot of limitations to this, for starters I didn't increase the rent at all and I assumed no appreciation beyond the ARV.

However, if you have support for the deduction(HUD/closing disclosure) and a proper methodology of allocating cost to the property and land - you should be fine.

The market value is about $300k and the balance on the loan is $165k.

With this income, I have finally balanced my credit card situation.

My offer to the seller (please analyze and offer feedback, offering soon)-$230,000 for the house-$60,000 down (paying off lien, avoiding foreclosure, I'll cover closing costs)-Seller financing for the $170,000 balance at 3.5% ($495.83 payment to him monthly) interest only for 5-7 years (seller's choice)-If he takes the offer for 5 years, he'll net $259,749 for the house-If he takes the offer for 7 years, he'll net $271,650 for the houseOverall I think this is a very fair offer and not a bad way for him to get out of this situation considering the alternative.Property and Cash Flow Analysis based on Current RentsOffering Price: $230,000Closing Costs: ~$2,500Rehab: ~1,000 for some exterior paintingDown Payment: $60,000 to payoff lien, closing costs.

If the property is properly marketed and there aren't any offers within the first 2-3 weeks, then it's time to reevaluate the situation.That being said, there are some markets that are slow due to geography or other local economic issues.