OF course this is what your going to get when you have super cheap houses with high rent ratios as we all know those are also the most risky.. the most stable markets and the safest markets are in this metric the worse markets..A neat graph or report would be to see tenant defaults in a given market ...

Also, are there any reserves, specific insurance provisions, escrows, etc...Also I'd look into what the default provisions are.  

Too many moving parts and frankly, not the best opportunities for arbitrage.I suggest high-equity defaulted mortgages is a better list to start with.

Another was needing a bunch of work, so am leasing purchasing to a construction laborer and he is repairing, if he defaults, the house will be better off than I acquired it and he will have paid for in within the first year anyway...So, look a little harder for the deals, they are probably in your area...Darron

Taking a promissory note as the option price is also a financing arrangement, but you may avoid this if the note is secured and the optionor cannot terminate the option from any default, separate transactions.

Maybe Baton Rouge would be worth the risk.. as you have a good chance at some upward movement in value and a very strong rental market.. but generally speaking non equity deals in a flat market or one with little to no history of appreciation is not a good move.. and can lead to a default situation rather rapidly is your not very well cash up to handle tenant default while your paying the sellers mortgage.

Many people sure thought that they were well diversified when their money managers put them into funds that included Credit-Default Swaps, Bear Stearns, and Lehman Brothers.

If it's over 10, then question the price.Without expenses you can't get to the NOI, so take GSI * 30% as a default expense (it's a guess, but if reality is bigger, then the property is in poor condition).NOI divided by the (mortgage *12) is the DSCR and you'll need 1.2, 1.3 or bigger for the loan. 

(b) Notice of hearing shall be served in a manner authorized in subsection (a) upon:(1) Any person to whom the security interest instrument itself directs notice to be sent in case of default.(2) Any person obligated to repay the indebtedness against whom the holder thereof intends to assert liability therefor, and any such person not notified shall not be liable for any deficiency remaining after the sale.(3) Every record owner of the real estate whose interest is of record in the county where the real property is located at the time the notice of hearing is filed in that county.

The lenders were stung hard with loan defaults from the last downturn.In development projects the developers generally do not become profitable until the tail end of a project.