It doesn't matter that the rents aren't showing up on you last tax return, they will just take your gross rents from your leases and subtract 25% as a vacancy / maintenance factor and then subtract the new mortgage PITI from the remaining number.

Then you need to put $200,000 of repairs, so subtract 200,000 from 420,000 and you get $220,000.This is the max amount you could offer on the property to get your cash back out, and you're not even factoring in closing costs and holding costs.

Madison, WI is one of those, and I am not sure exactly why, unless the presence of commune living and student housing is a major factor - lol.

Ideally there would be a way to work some cash flow into this deal to offset loans or ultimately provide an additional source of income for them in their retirement.Having poked around on BP for a while and listened to copious podcasts, I have come up with a rough strategy:Get home equity loan on existing property for around $300-$400KUse loan money for 20% down payment on two properties: one SFR for them somewhere cheaper in the SGV like Rosemead or El Monte, and one multifamily for us to house-hack within 30 minutes or so of downtown (El Sereno, Highland Park, USC area, Inglewood?)

If not, you'll need to factor in your PM costsHope this helps!

And you'll have to factor in costs to sell (like realtor fees) when you do go to sell. 

In my area it almost always requires including all of the utilities so if that's the case for you don't forget to factor in those add'l expenses. 

Top dollar is not their motivating factor but they do know the lot is worth substantially more if it's zoned commercial and I'm hoping they will work with me on the contract.

Hi All,Wondering what are the major factors that everyone considers when looking into different real estate markets?

Assuming, one has picked a market/sub-market (based off market research criteria), the critical factor, for us, becomes exit cap rate.