Because of this I approached the city asking for a variance to convert it to a commercial use and I won approval.

Your generalized approach could work but sourcing the data would be the challenging aspect of this.

This approach isn't making me rich each month, but in 20 years, if I decide to keep, it'll be paid off and throwing off whatever the rents may be at that time.Sure, making 100k in a flip is great (and looking forward to that deal) but a few more like these and life becomes easy.I saw the benefit of having 50% ownership with finding the deal and dealing with the rehab and the partner made their 50% by letting me use their money for a year.

@Virginia EdwardsWelcome you will find incredible resources and people here.

That doesn't mean that would be the best approach for you though!

Incredibly, a neighbor walked over during the inspection before I had even closed, and made an offer.

What you have effectively done is ruined your returns on the other properties in order to purchase a deadbeat.I understand the point of your original post was not to get into this part of it, but I caution you on your approach to investments.

I like the conservative approach you took with incorporating vacancy exp, repairs & maint, cap ex, and property management.

I can't use the income approach, its a small town with maybe 3 restaurants or so, comps are nonexistent (I think) and its been vacant for a few years now.According to the assessor the land and building value is $50,500 (I'm using that as a ball park number) although the current owner did pay 300,000 for it previously.

With this approach it is very important to set a before rehab price that leaves room for added value.