No vacancy expense other than make ready repairs.

My answers are: 1) lack of sufficient fund to build now, 2) this is my first investment in R.E. so I don’t want to move too fast, 3) due to COVID-19, sales market may not be as good as rental for awhile, 4) I want the property, or at least its lot appreciate more over the next 5 years.Here is the estimated rent (not cash flow) with a vacancy of 10%.

I know they manage several in the area.Regarding questions to ask PM's, there are many, but here are the categories you should hit and some questions from each:- about their business (how long in business, how many staff, what roles)- about their properties (how many properties under management, typical rent range for them, their vacancy rate)- about their fees (property management, tenant placement, tenant renewals, inspections, etc)- about tenant screening (in house?

(tennat pay all outgoings)As far as Covid-19. essential workers would be great, but as with any Commercial property you always run the risk of lower vacancy time frame. 

@Michael Everett, when I conservatively run your numbers, I think you might cash flow a bit:$1200:  Gross Scheduled Rent (GSR)($60):   Vacancy, 5%($60):   Repairs, 5%($60):   CapEx, 5%; I normally underwrite to 10%, but with a new home you can go longer.

@Adam Blachnio It is selling as a 6.9% cap and if I was able to increase the rents by just $100 through rehab and assuming 10% vacancy (both are conservative assumptions in my opinion) it would be an 8.9% cap.

Why should there be any correction in the housing market except for investors who are over leveraged and will have to unload properties as rental vacancies rise.

In addition to being underwater, I wouldn't be surprised if the owners are also seeing negative cash flow.At $2,574/mo in just principal and interest ($508K @ 4.5% with 30-year amortization) and another $833/mo in property taxes, you're looking at a $3,407 monthly loan payment, of which at best $1,800 could be offset by the rental income.That means you'd be on the hook for $1,607/mo + repairs + maintenance + management + vacancy + insurance, and all for the privilege of living in a 3/1 unit with ZERO equity right next door to your tenants.Given all this, I don't see that making their problem yours is the best way to go here.I would take a hard pass on this one, personally! 

This was a hard to fill vacancy and a section 8 disabled older woman looked like a great choice during the 15 minute showing.   

Vacancy, CapEx, Insurance, management fees, Repairs, and Taxes?