This helps explain why most of the examples where I've seen this done are done with some sort of affordable component that includes low income housing tax credits or they're done in luxury areas where the rents justify the conversion costs.

if he does the work,  he is either super cheap or can't afford to hire it out cause he will lose money. what u should look for is a run down place that u can bring back to life

Then there are times when the market is screaming higher (or for other reasons) you can afford to pay over 70%.

@Tom HarringtonThere are two main advantages an LLC has over anS-corporation.One advantage is that an LLC is governed by a private Operating Agreement that affords the company a tremendous amount of flexibility, whereas an S-corporation is governed by statutes and bylaws that limit the flexibility the company has with respect to management, profit distributions, meetings and more.

I'm not interested in being a slum lord, although Memphis seems to afford lots of opportunities for that.  

You do not need their money badly enough to go through this, and if you do then you can't afford to be a landlord.

It's best to do all the work you can afford, even if it's 5 years out.

I'm assuming that you're going to reject this offer, even though it is a full market price for the house, simply because you can't afford the commission. 

How would I know what price range I can afford?

I just have choices now buying a nice car early on wouldn't have afforded me.