I can see values dropping a bunch but for the cash flow rent rates to drop by 40% something drastic had to happen in the area.Either your property was in nice shape and now it is trashed and instead of pouring more money in you have reduced rents over time OR the area has been hit with massive foreclosures and new purchasers reduced rental rates to rent up fast.I like the idea of the local investor to take it on.I never buy 2/2's unless it's apartment buildings.For resale 2/2's are really hard and do not hold value as well as 3/2's.Some areas it might make sense but not for me.

Steve L hit the nail on the head...in my market there's about a 5% bump in appraisal for condition.

Jeff, doesn't your real estate give you an inflation hedge, and at the same time gives you income, leverage, and tax efficiency?

Its a big reason we didn't get hit with the housing bubble.

Ya, I didn't even bother deselecting ones I knew, I just hit 'select all'You're welcome for the spam :)

I plan on joining a real estate mentoring club once I return to my hometown, and continue to prepare myself as much as possible over the coming months.Some general questions that I have:1) What are some things I could do to prepare myself in order to hit the ground running?

Crossing of a calendar year or fiscal year just means that the income is going to hit in the next year, and that is when the tax bill will be due (although you might have to prepare and pay estimated income taxes in that case).

When desperation drives the car, you will likely hit a tree.Also, Joel made good points to the LTV funding levels, I do think there is a limited amount of guys out there who will entertain the deal if the home has true equity upside.

I own several SFHs in the lower end of the scale (20k-after-rehab-ish) and while those rent for 550$ on average, some months I may see 20% of that in net income, and most of the time like Jon side, when I get hit with something "unexpected" it may take a big chunk of the gross since while the house is cheap, maintenance costs are high in comparison.

Then you can invest it in real estate without the tax and penalty hit.