The numbers currently make sense but we are concerned with the potential Health risks as well as how this could effect us being able to rent the units in the future or selling  the property a few years down the road.

I much prefer a lower cap rate in California knowing there is a high likelihood of long term rent growth and capital appreciation vs. concerning myself with a higher initial cap rate in the midwest but on an asset where rent grow is small and an asset that is deteriorating. 

The biggest concern I have is that most individuals in my network will not be able to cover the whole $100K purchase......and I wonder about having 3-4-5 private loans and the costs/hassles associated with that.  4th lien position? 

Big concerns are bankruptcies/repossessions/evictions and crimes against people/property.

Now though, he said he would highly recommend the more thorough heat treatment method at a cost of  $1250. 

These homes seem to be priced at what they are worth, but I'm concerned with owning one so far away from the large population. 

So I find that when I evaluate properties according to the BiggerPockets method, including CapEx monthly, including 5% of gross rents for repairs and maintanence, including 10% for property managers, etc, NO property passes any test.  1% rule, 50% rule, or even being positive cash flow.  

I have some basic construction experience so my main concern is getting the electric plumbing etc.

If so, I would say he is right to be concerned.

Mr.Jones,Thank you for the reply and providing a direction to go in concerning this.