It was not in the best of neighborhoods.

I am assuming that since you know the neighborhood and the typical rental rates and typical rehab costs, you are in a good position to see how the property will cash flow even before an inspection.

However, he is aware he may lose money on this investment, but he feels he is improving the neighborhood as a whole by adding the special touches.

The house, AFAIK now, would be good for me: appropriate neighborhood, I can make the changes I want, etc. ofgift

IMO it is dubious is anything appreciating at LESS THAN 8%.Research some Denver metro newspapers and read articles on the RE market.

Depending on your locale, its pretty easy to check local newspaper classifieds, and online sources such as Craigslist which are excellent in many markets.

People who are comfortable living in a neighborhood expect to pay a certain amount.

comparable sales meaning houses sold within the neighborhood?

Aside from the painting, you will have holding costs, advertising expenses, realtor fees and misc. sales fees to contend with---although your gross profits are in the neighborhood of 30%, your net will be something significantly different.

So let me just expand for the BENEFIT OF FUTURE READERS and other newbies who think having a "mentor" is the be all and end all to becoming an investor.Why would you agree to a purchase price of $198K in a neighborhood of $90K to $145K houses?