Your estimated Capitalization Rate would be about 6.7%.Make sure that you have sufficient cash reserves for unexpected repairs and expenses.Make sure that each month you deduct the following expenses from your rent and save them for future payments: (1) real property taxes, (2) replacement reserve and (3) insurance reserve.For your information, the 50% rule, which is generally considered to be fairly close to actual expenses, states that …50% of your gross rents will be taken up by expenses... property tax insurance vacancy property management maintenance capital repairs legals and accounting, etc.From the remaining 50% you service your debt, if any, and the remaining is your profit.

That improvement project is probably long overdue but whether or not it raises values remains to be seen.

I'm not sure if the LOI alone will satisfy the controlling interest requirement.  

Since he broke the lease, are we still obligated to send him the remaining amount of the security deposit and a letter confirming our intentions?

She's gotten to know the both of us pretty well, but my best friend remains the main point of contact for the deal.

My in-progress rehab will hopefully hit that, and I think I'll be satisfied at those numbers as it's a mostly OO neighborhood with expected steady appreciation.Without knowing details of your market, I'd probably shoot to be all in at a max of $100-110K.

Watch out for other  gov't liens, code violations, property taxes, and recorded/unrecorded HOA debts, as these all remain with the property.

Your comments are exactly why people remain hostile.

There are deals to be found - I've had some success with courthouse step foreclosures, but generally they make sense for flipping, not buy and hold (after rehab costs), since rents just aren't high enough to satisfy any of the "rules of thumb", be it 1, 2 50%, etc.One of the challenges in NorCal is that too much of the money is derived from few industries, so there is a lot of sensitivity to fluctuations in those areas with resultant impacts to the RE markets.

Yes, of course I will sometimes accede to the tenants wishes when they are reasonable even if it hurts my income, because I believe in keeping the tenant satisfied.