I have a young tenant with whom I had a difficult relationship initially – I think this may be the first time he’s lived on his own and he is a bit high maintenance but things have settled down.

The issue with ONLY using this method as a way to invest is that it fails to take into consideration: 1) vacancies and bad debt (i.e. uncollected rent); and 2) operating expenses (including: taxes, insurance, repairs & maintenance, capital reserves and utilities, property management, super(?)).

#01  SFH-3/1$65,500 Asking $9,900 Rent ($825/month) $876 Insurance $748 Taxes $841.5 Management (under current management) $1,386 Maintenance & Vacancy Estimate (each 7%) $6,049 Estimated Net Return (CAP 9.24%)COC = 15.11%#02  SFH-2/1$59,900 Asking price $9,444 Rent ($787/month) $801 Insurance $724 Taxes $803 Management (under current management) $1,322 Maintenance & Vacancy Estimate (each 7%) $5,794 Estimated Net Return (CAP 9.67%)COC = 15.76%#03  - Fourplex 2/1’s$169,900 Asking price $30,072 Rent ($2506/month) $2,273 Insurance $2,774 Taxes $2,556 Management (under current management) $4,210 Maintenance & Vacancy Estimate (each 7%) $18,259 Estimated Net Return (CAP 10.75%)#04  Duplex-2/1’s$79,900 Asking price $13,200 Rent ($1,100/month) $1,069 Insurance $893 Taxes $1,122 Management (under current management) $1,848 Maintenance & Vacancy Estimate (each 7%) $8,268 Estimated Net Return (CAP 10.35%)

We look for things such as, cash flow, maintenance, rehab, tennant issues and the like. 

I'd like to take this property as an example and see what input others have:Property: Athens, GAAsking Price: $69,900Description: 4/2 double (1,539sqft), You can invest $69,900 in this low maintenance investment and start collecting some good returns.

I started my own building maintenance company and saved all of my money and when I was 29 I bought my first house for $210,000 (it is nice not having a mortgage : ) .

I am going to list the high points below:List price $35,000.00Negotiate down to $29,750.00 (15% reduction)Down payment of 15% = $4,462.50My principal = $25,287.50Interest Rate = 5%Term on loan = 15 yrsNote = $199.97Sale price to lease option holder = $44,625.00 (1.5 x my purchase price)Down payment paid by buyer = $4,462.50 (10% of purchase price)Buyer principal = $40,162.50Interest charged to buyer = 8%Buyer term on loan = 15 yrsTaxes = $50.00 (added directly to buyers monthly payment)Insurance = $50.00 (added directly to buyers monthly payment)Buyers monthly payment = $483.81 (Note + Taxes + Insurance)Buyer covers all maintenance and repairsMy monthly profit $183.84The beauty of this plan to me is that the amount I put down in a down payment is the same amount that the buyer pays me in a down payment which causes me to have ZERO money on the table when they start making monthly payments.  

Are you handy with maintenance? 

Also there appears to be a lot of deferred maintenance on the exterior which usually doesn't bode well for the interior.

The only problem with section is one inspection per year but if you kept up with the maintenance you're fine.