This agreement shall become effective as of the date of the last signature.7.

So over time your "expense" curve will get alot smoother and stay around that 50% number overall.With one house you might be at 40%, 40%, 40%, 125%, 40% each year...WIth 20 houses, you'd be more likely around 49%, 51%, 48%, 52%....One last point - that bad year above at 125%, you're effectively out 16 months of gross rents.

Does the pre approval process effect your credit?

It will be secured against this house worth $80k" That pitch is especially effective if you get around other investors.

I decided to not file a claim and just take care of it myself as it was more coet effective and I would not have a claim filed...

In Virginia there is jargon to the effect that you are responsible (if you are a landlord) to provide livable conditions and it may cause further problems for you if they say you haven't been providing that even when they haven't been paying you.

So effectively it cashflows 800, but some of that is just money he's saved. 

I'll only add that when he shows you his insurance documents, call the insurance company and verify that his policy is in effect before you hire him.

Does anyone have experience of a more effective compensation package?

I then filed a few restraining orders and such and basically turned the local police force into my personal bodyguards.So, i ended up renting the house to a police officer that I had met during the process for 100 dollars a month (it was worth 800), he had 4 dogs that made it difficult to find a place to stay cost effectively which only helped annoy the other homeowner.