Sometimes garbage is exactly that...but sometimes you can see that diamond in the rough and be able to polish it up and the returns will  be great!!

We are only required to return the amount  of the actual deposit less damages with an itemized list within 30 days of vacancy AND a forwarding address. 

This has proven ineffective as most of these properties' income can barely sustain themselves [even with a "larger" (20%-30%) amount of equity down] and the ones that do have worse returns and higher risk than if you were to put money into a CD, for example. 

The deal he's offering is that I cover the entire cost of the 5% down deposit and renovation cost (closing, miscellaneous, etc.) and in return, we each pull 12k annually.

However, the trust may be a revocable living trust that does not have a tax id and file it's own returns. 

@Samuel Carmichael besides what @Brandon Ingegneri said about looking at absolute dollar amounts to figure out if it's even worth the aggravation, I also agree with @Michinori Kaneko about looking at percentages.Personally I look at percentages first, namely 1) cash on cash return (yearly money back after all expenses including mortgage, divided by all money invested to get it rentable) and 2) debt service coverage ratio (net income after operating expenses but before mortgage payment, divided by the mortgage payment).The first is (obviously) a measure of return, while the second is more of a measure of risk as it tells you how much of a buffer you have between the property's net income and the monthly fixed mortgage payment.After you get a little more experience you'll also start to factor things like replacement reserves into account.

Well someone finally returned a call and the problem is that I found the property on the Foreclosure list.

But it was damn risky and the potential returns ridiculous.

@Scott Inno First you need Trailing 12 Month and P&L, Even ask for Schedule E of the sellers Tax return. 

Make sure you learn and use it appropriately.There is some discussion about "velocity banking" where you use the heloc to pay your mortgage and it returns a slight advantage.