Expect to pay 3% to 7% of your gross construction cost for that service.

Maybe that's one ride you don't want to take.Last thought...and this is strickly a gross over-generalization...but it seems that some areas of the country make it very difficult to employ certain strategies based on prices, the market, and completition.

If each house needs ~5k to rehab prior to move in then I can still buy 3 of the cheap houses for less than the $50k house.....so I'm pulling in double the gross rent.

A natural person who, either individually or jointly with theperson’s spouse, (i) has a minimum net worth of one hundred fiftythousand dollars ($150,000) and had, during the immediatelypreceding tax year, gross income in excess of one hundred thousand dollars ($100,000) and reasonably expects gross income in excess of one hundred thousand dollars ($100,000) during the current tax year or (ii) has a minimum net worth of two hundred fifty thousand dollars ($250,000).

If I or anyone gets those accurate, then I or anyone can not lose while solely using the 75% rule when the exit values are $300k-$600k.Using $400k as an example exit strategy and $50k as an example rehab, the 75% rule states I can pay $250k for it which puts me at an all-in cost (acquisition plus rehab) of $300k, leaving a gross spread of $100k.My RE fees ARE fixed based on 5% of $400k, if I get more, then the increase is good, not bad, if I get less than $400k, it is not an issue of a sharp pencil on fixed costs, rather an error on exit calculations, which I stated was one of the two items you need to be accurate on.

On the owner finance if you get little to nothing down and get them to hold for a low debt service say 3% interest rate principal and interest instead of a 6 to 7% rate that is better.Looking at this deal it looks very weak.2,300 month X 12 = 27,600 potential gross rentBack away 60% costs because of landlord paid water27,600 X .40 = 11,040 NOIAt a 10 cap that is 111,040 purchase price NOT INCLUDING all the CAPEX needed you are talking about which is in the tens of thousands not including what you can't see in the walls etc.Even at your 225k you are looking at a 4 to 5% cap rate before CAPEX.

So I'm getting:$5000 (gross) / 2 = $2500$2500 - $1350(debt service) - $500 (water/heat/sewer/trash) = $650Which is still $162/door but remember you are putting in a hefty Down Payment.Even at $4500/mo you will get $100/door.

Gross Income=2,050.

Adam, with $1800 gross rents and $120k purchase, you are at 1.5% rent to acquisition ratio.

I live in the Midwest, so an avg/decent income is 50k a year.I have 2 currently, that gross cash flow, 500 a piece, after mortgage,taxes, and insurance.