You may need to pay for $$$$ - eviction - clean up - lost rent - mental anguish - loss of local reputation LOAs are easier and cleaner for the Newbie.

But again, you need to get trained in how to market- first in how to find a 'target' market (people in distress from foreclosure, BK, job relocation, job loss, divorce, probate,tired landlords, back taxes,) and then how to advertise (bandit signs, classified ads) and direct market (business cards, door hangers, direct mail) to them.IMO, REI is much easier to learn because it's all just math.

As prices continue to soften, there will be better conditions for buyers and more sellers will wish they had been able to dispose of the property in 2013.There was an auction held recently where the Seller walked away with a loss over $3 Million amerikana dollars on 3 high end properties.

'our loss is your gain'.

Cap gains will be due even if you wait a year on the gains (or losses) in the new property and in the original property.

Not feasible with a 1031 exchange - have to identify the properties within 60-90 days (I forget exactly) and then close within 6 months.

You might find that in the law of large numbers, there could be a 40% loss or delinquency rate say at the 125K to 150K arena, won't really apply to my specific underwriting.As a mortgage broker I had one of the lowest delinquency ratios in the nation with my wholesalers, always in the top 2 to 6% range.

At the time a personal residence is converted to rental use, the tax basis for depreciation is the LESSER of fair market value at the time of conversion, or the cost basis (original cost + cost of improvements - casualty losses claimed).

Also, I'm sorry for your loss.

One of my concerns is that the prior owners are willing to take such a huge loss on the property considering they want it to be an investment, but the broker assured us that it's been sitting on the market for quite awhile, they're unable to properly manage it from so far away, and the real estate market in the area is slow - so they've been aggressively priced to sell.Anyways, the house just next door to the east (the yellow one) is a very comparable property detail wise, but not quite as nice and it currently is leased out for $700 per month.