Then when you incur those expenses, I think you will achieve a cap rate at about what you would achieve with an 11.3% cap rate in a nicer area.I see better deals all the time when investors apply for our loans, and we have a mechanism to evaluate the volatility.

Funds are given out in order of: Sheriff costs, property taxes, lien holders (mortgages, mechanical, etc) in recorded order, and finally, the owner, if any is left (pretty rare). 5.

But branching out quickly into direct marketing, once I've worked out the mechanics and have a solid process for financing and management.To maximize the return on time invested, aiming to focus on multi-family properties (2/3/4 units) to allow me to reach my goal with less total transactions (less loans, less overhead, etc).

Another thing to watch out for is companies can use terms like fully rehabbed etc. and when you look at it they put carpet and paint in and all the mechanicals, bathrooms, kitchens, roofs is all old.

These two in particular are a strong negative in my mind.If you go with a home warranty to target a specific mechanical item, make sure you know what additional charges may be involved to replace/repair.

In a short time you will begin to understand the financial mechanics of rental properties.

Generally, you want:Asbestos/Lead abatement, if necessaryAll DemoStructural repairs/updates (foundation/under sized framing), if necessaryUpdate/replace mechanicals (rough plumbing/electrical, etc.)Replace windows/doorsTile/hardwood floor installationDrywallTrim/cabinets/plumbing fixtures/other tilingPaintCarpet/Final light fixturesLandscapingDepending on the job, much of this overlaps, happens concurrently, or moves slightly.I feel for you, 3 kids in a work zone...phew.

I have seen to many investors miserably fail b/c they buy dated homes with old mechanicals and they simply do not make any money on a leveraged purchase b/c their homes sit vacant and they are eaten alive in maintenance.

It does sound like Dent is putting too much emphasis on one factor (baby boomers).

Do you have a break down on how much each mechanical system ended up costing you etc?