.$55,000 Turnkey house 70% ARV rule = Comps need to be worth $78,500 "1.5%" rule = Needs to beat $825 a month rent Average Rent = $850 50% rule = $425 left for mortgage 25% Down payment = $13,750 Rehab = $0 Closing Cost = $2500 Finance = $41250 Mortgage Payment = $197 Cash flow = $228 [$2736 Annual] Cash-on-cash = 2736 (annual cashflow)/16250(down payment + closing cost) = 17% Cap Rate = 2736/55,000 = 5%$40,000 Fixer Upper 70% ARV rule = Comps need to be worth $78,500 "1.5%" rule = Needs to beat $825 a month rent Average Rent = $850 50% rule = $425 left for mortgage 25% Down payment= $10,000 Max Rehab = $15,000 Closing Cost = $2500 Finance = $30000 Mortgage Payment = $143 Cash flow = $282 [$3384 Annual] Cash-on-cash = 3384 (annual cashflow)/27500(down payment + closing cost) = 12% Cap Rate = 3385/55,000 = 6%

A few months ago our next door neighbors listed their house for sale for $210,000 which would really be the very upper end of similar sales in the neighborhood.

Raising both of our credit scores for the next step.Step #2: Next I would like to find a good fixer upper in our area and buy and renovate it with a 203K FHA Construction Loan.

My strategy is Buy and Hold and I don’t mind some repairs to get the place up-to-snuff, but I’m not really into any true “fixer-uppers”.

I usually set Cash Return to > 8% to help zoom in on cities and neighborhoods in SoCal.http://ochousingnews.com/To access the filters go to the search box on the upper right corner >  Click on More Filters > Go to Investor Filters > and experiment with the different options.The home values are based on list prices in the MLS and the estimated rental amounts are based on rental comps in the MLS.  

Last year I purchased a fixer upper, and had the appraiser come out,  and they found a huge error in their assessment documentation. 

Also- I have seen that it is common to have a different color on the upper dormer side (side of the house portion near windows) of dutch colonials.

I would pick a few in the middle to middle upper range and call references. 

You have the upper hand here I believe because you can discuss with the seller how you can purchase the home.

The houses we're looking at are fixer uppers, and I don't know how things like homepath or other programs work with investment properties.