Those will be low income areas, you'll have tenants who won't pay, more vacancy, and the homes won't appreciate as much as nicer areas.

The floor might also be bowed where the toilet sits from rotted out sub floor and needs to be redone and extra structuring underneath.If the light fixture has sustained water below it's best to replace it rather than something bad happening later on.

Louis (I know, I know)$35k all in, will rent for $750bought all cash, hard to finance something like thatDeal #2:25 SFRs in the same area, built around 1940-1950 (sample pic below)mostly 3/1, 900-1,200SF, expected rents around $550-700total cost $640k (about $26k per house)came with 80% note, 25yrs., 6%, $3,200 monthly paymentmonthly gross rents currently are about $14k, with 5 vacancies, so total potential monthly gross rent is about $16-17kThere are many on BP who warn against buying rentals in marginal areas (75% of my tenants are S8) but also some who think it's a good opportunity (see Lisa Phillips' excellent post on War Zones).I used to live in St.

Using the 50% rule and a new >$800 PI payment you are ranging from several hundred negative cash flow to maybe $100/month if you happened to score one of these deals in a slightly higher end town.Obviously if you just did $50K of rehab you should cash flow much better than this the first several years as repairs and capital expenses should be low, but in the long run you need to account for them.

Account > Edit Profile > Experience > click on add new or the - red icons below to adjust each current setting.

They said we could also make another principal payment to get the LTV below 78%.

Some investors use it to filter prospects, some private lenders use it as a threshold for their terms, etc but other than that, it's just an indicator.When I analyse a project, I always work backward from the minimum profit I want to make....next is ARV.....from there, I calculate all other expenses (including closing costs on the purchase and sale) and work down to the bottom line.I use a private lender that doesn't know or care about the 70% rule so I don't use the rule.

I plan to sell my current home (with about $30k in equity) to pay down the mortgage and thus increase my monthly cash flow and decrease my debit to income ratio which will come handy for future deals.However, my true question is in the subject of this post, I have submitted a few HUD offers for Owner-Occupied properties at 30% below the listing price and HUD has counter offer at 10% below the listing price.

I linked it below.

That is rare.With these low priced properties realize that it will be difficult to refinance in the future as the loan amounts and the property value is below minimum loan amounts.