With occupied judicial sales we build in a $5000 expense to our numbers in carrying cost and cost to evict/CFK.  

I have several owners who purchased homes for cash in flood zones and do not carry insurance.

I personally am a strong supporter of only carrying debt on cash producing assets.

I am a cash and carry guy but I am not opposed to financing the total operation either.

Not only do you need to figure out what actual rehab costs are, you also need to figure your carry costs, closing costs, realtor fees, etc as well.  

@Nick CiarnielloYou need to collect far more information before you would know whether you have a deal worth pursuing:who are the clientele;how does the rent role compare with the local neighbourhood;what is the economic vacancy (physical vacancy + turnover + uncollected rent + evictions);what are the operating costs;what is the physical state of the assets (roofs, HVAC, envelope, appliances, parking, etc) and how much near term re-investment is required or likely;what is your target rate of return.You want to obtain real numbers (not rose-coloured prospectus projections) for the past 2-3 years and use them to carry out your own discounted cash flow analysis of the property.Also keep in mind that properties freshly on MLS - particularly during the hopefulness of spring - are rarely priced appropriately to be a deal.  

I thought even reits are typically leveraged to LTV 60% Sometimes we are paying off higher interest loans at 6+% from 10 or so years ago or seller-carries at a discount for early payoff or commercial loans which have higher risk, balloons, adjustable rates and annual reporting requirements.Thank you for this post and sharing your lessons and insight @william s.!  

There are always going to be bad deals in any state, city, town you go to but there are also gold mines to be had if you know where to look.  

The one area of growth I'm having trouble believing or understanding, is the amount of debt carried by an investor while accruing properties.  

Think of it like a gold rush where the person with the best mining tools will find the most gold.