If you do the math ($14,200/$249,900) the CAP rate at asking price would be 5.6.

I always suggest that individuals contemplating real estate investments 'do the math' to determine the initial total cost of acquisition (year 1) and ongoing income/expenses including maintaining a cushion for any unanticipated expenses.  

Do the math a few ways to see what makes mathematical sense.  

I just did the math with his ARV and the numbers still don't work.

. - I am a math teacher btw) - I did create a column to flag bankruptcies and foreclosures.

In short do the math on all prospective properties to get a quantitative feel for that market.  

Do your homework , you can lose big if you buy in the wrong area , the lure of a cheap price can be exciting .

what you need to do then....is to figure out what your maximum is to be profitable.....aka, what a house is worth given what condition it could be in (which you will more than likely will not know), your costs to foreclose/take possession, your costs to sell, etc.....all your costs must be figured out.....once you have the math, you know what your highest bid number is......you don't bid based off what others are willing to pay (a largely impossible number to know), you buy based off what you are willing to pay.

Again thanks everyone for the love and homework lol I will be diving in shortly.

On the other hand, if you market this as a security, then you are ok, but to do so you need the advice of a securites attorney and not a mere mortal real estate investor.The second problem you are about to run into is that while your numbers work on paper and your math is correct, you need to have a property to back up your theory-math.