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

The MLS method is talking about works great, Direct Mailers have brought me some great success, you can also go to the court house steps auctions and hand out your business cards to the guys there and let them know what you are looking for and if their investor buys one of the fixer uppers by accident because they are typically site unseen that you are more than happy to take it off there hands, this works well and is another way to out source.

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.

@Jean Bolger, I had brought up the self-directed solo 401K to @Amanda Salas because, not knowing her age or financial history, I thought it might provide a way for her to roll in employer retirement funds (if available) and start investing in real estate right now.

If you had a deal like this how would you approach it?

What would be the best way to approach this so that he can't back out and I will have some recourse if he does.

@Pin Srey I like your approach, flip the little higher end, keep the lower priced as rentals, great strategy.

Thanks Kelvin...reading that just brought a big smile to my face!