The properties were absolutely filthy on the inside and the outside had roofs that looked as if they hadn't been replaced in 50 years.

For instance on some apartment buildings the lease says it has to be on the ground with a pole in specific location versus mounted on a roof etc.No legal advice.

Here are the details:Beds: 3 BedBaths: 2 Full BathHouse Size: 1,634 Sq FtProperty Type: Single Family HomeYear Built: 1964List Price: $39,500 Plan going in - #1 - Buy & Hold #2 - Resell for profit #3 - Lease option FARV (Fast Sell After Repair Value) $110,000 Going to offer $25,000, looking to get it for $30,000 Estimating $40,000 in repairs (roof, siding, HVAC etc)Total project cost $70,000Down payment $21,000 (30%) Expected Rents $900 (Based on numbers from Zilpsy, Rentometer, Zillow and test Craigslist ads) Breakdown of monthly expenses - Total operating expenses: $380.00 Mortgage expenses: $278.22 Repairs: $90.00 CapEx: $90.00 Insurance: $60.00 Management: $90.00 Monthly P&I: $278.22 Property Taxes: $50.00 Total Monthly Income:$900.00 x50% for Expenses: $450.00 Monthly Payment/Interest Payment: $278.22 Total Monthly Cashflow using 50% Rule: $171.78 Looks like almost a 9% Cap Rate, and 12% ROI.

The property needs about 5k in unanticipated repairs based on the inspection, there is a special assesment of $165 that was not disclosed in the contract, the roof on the building needs to be replaced and the association does not currently have the funds to repair it properly hence the special assessment.Long story short I don't want to walk away from this property because these are all issues that can be addressed so I countered with a lower price based on this new information.  

In most of my properties there is an Austin feel - we use a lot of hand made steel planters and black rock gravel in the landscaping, metal roofs, and screened in porches. 

.$0 down (with agreement on house 2)10 years remaining on lien $430/mo including taxes.Needs new roof within 3 years, $10k and maybe a few updates throughoutHere is the kicker...The seller was just notified of a tenant injury from a few months ago.

In the coming weeks you will need to look at any long term maintenance issues, roofs/roads etc and see what resources have been built up and what projected costs will be.   

Management, evictions, kitchens and roofs cost almost the same of a $500/month unit or a $900/month unit.My rule is not too buy apartments that rent under $500/month.  

He wanted to rack up the points for his frequent flyer miles.I told him no for all the reasons stated above (I didn't give the reasons, I just told him I wasn't set up to received CCs).

@Robert Ehrlich You forgot to add into your calculations: future vacancy (it won't alway be fully occupied), evictions /legal fees, capex (roof, painting, heating/AC, appliances to name a few).