You just have to monitor them on a regular basis.

Right now I have two percs registerd by the Health Department.

Does the 45-50% include a sinking fund that is funded regularly out of rents to pay for future capital expenditures?

It is a small bar but has plenty of regulars.

As the other poster indicated, why could be motivated by many reasons---divorce, relocation, changes of income/health tend to be the leading motivators most of the time...As there are no renovations needed, ARV is the wrong term to use (after repair value pertains to properties that are in need of repair)---CMV or current market value might be a more appropriate term to use.

Just get a regular mortgage if you can at a low rate.

From what little I know (and that is ALL I know in this area), I can't imagine how a place will cash flow given the numbers you supplied even with a large downpayment or do better than a regular MMF.

ctrentalguy,You can't possibly know an exact dollar figure for evictions, legal costs, damage, lawsuits, and many more of the expenses, but they do exist; do occur with regularity; and they are significant.

This scenario is entirely real and these situations do happen with regularity.

"I buy properties regularly" I wish I would have put that on my business card instead of Real Estate Investor.