I copied this from a search on real estate ROE:Return on Equity (ROE) ratio calculates the amount of return generated in a particular year on the total amount of equity invested (or trapped) in a property.The amount invested (or denominator) is calculated as the initial investment (down payment) plus the entire increase in net property’s appreciation and the entire decrease in outstanding loan balance incurred prior to the year the ratio is being calculated.Cash-on-Cash Return is a similar calculation, but since the two draw backs of the traditional Cash-on-Cash Return are that property appreciation and principal debt payments are not factored into the formula, Return on Equity adds these two components to the traditional Cash-on-Cash Return calculation.A property’s net equity increase is calculated by determining what the “Net Sale Proceeds after Taxes” would be at the beginning of a year, and then again at the end of the year.

Lots of questions here so if you can provide other details that will help me guide you properly.

I'll have to take photos tomorrow to properly illustrate.The neighbor also said that the mainline water pipe had several leaks in the past and has pictures to prove it.

You can see if the seller has been patching and fixing with cheap and improper repairs to suck out all the cash flow  instead of properly maintaining the asset during ownership.

I thought I had selected the proper forum on my phone while writing this.

Unfortunately, marketing is not really the top skill to be great at locating good properties, buying them properly, renovating them to at or above retail standards eliminating deferred maintenance and then acquiring quality, long-term residents and managing them properly.

Floor guy says he would put a transition piece and it will still look good, but I don't know if this is considered done properly. 

To prepare for it, just prepare a 1-pager summarizing the investment with what you laid out above plus some pictures an more background info on the tenant.For you personally or the entity that would be borrowing you or your accountant should prepare a balance sheet and income statement.

I would even be interested in a rent to own situation as long as the remaining balance can be paid off in a year or so.

The problem that I am needing help with is...if I have a 3.25% interest currently and the bank is offering me a 4.5% cash out refi that will take care all of my cc balances and give me enough to purchase new property, is this a smart move to go from a 3.25 to 4.5%?