So you could start out that way and then maybe not need one.Or you could short sale it, etc.Rehab would be the last ditch effort I would ever consider.Location, condition, etc are all known before you ever buy, so it not like you HAVE to buy it or will get stuck with it.Do your DD, REAL DD, not this electronic nonsense and youll probably be okAnd on $5k, a 15% return is only $750...

He held my hand through the finer details of getting this thing done and asked nothing in return! 

Even assuming someone paid all cash here, it's only about a 3.5% return based on their stated net income! 

The return needs to make sense but depending on the area you might settle for a smaller ROI but more of a potential appreciation play.

Need him out to sell, will be returning the money and starting the process.

My initial projections based on a buy and hold analysis are:$1550 a month in income(Lots of assumptions here)$904.78 monthly expenses(Including maintenance, management, and the vacancy rate)$645.22 monthly cash flow23.45% pro forma Rate$9240 net operating incomex 50% for expenses equals $775Monthly interest/payment equals $124.78Total monthly cash flow using 50% rule equal $65082.90% cash on cash return on investment30.90% purchase cap rateTotal operating expense $780 dollars a monthAs I stated earlier, the house is close to downtown and the State University.

I'm from there and my properties are there--so if you did need referrals for PMs or contractors or whatever, I have those--but other markets certainly do have higher returns now than Atlanta. 

The rules of thumb I have heard are people targeting a 24% return.

@Lucy ChangIn addition to filing a federal + state tax return - some cities/counties have their own filing requirement.It appears that San Jose considers you to be doing business within their boundaries.Below is a link to their website with instructionshttp://www.sanjoseca.gov/businesstaxYou can hire someone to do the proper filings for you or you can look at the instructions and do them yourself.You should look at the instructions on whether to put yourself as a sole proprietorship or a partnership.

She also should have used a certified return letter to verify that you (the owner) received the letter and were notified of the problem.