These offers have a purpose to outlay the following circumstances: Offer 1 – asking price with traditional financing, offer 2- offer based on NOI and local cap (what would prob be norm if they took to market), offer 3 – lower purchase price (higher than NOI/cap offer but below asking), using 97% seller financing & preferred terms (don't know what they will say unless you ask :)).Buyer Performa used for all offers:Scheduled Rent: $3,900 Tax & Ins.: $850 8% Vacancy Rate (average is 7-8%) 4% Management Expenses 10% Capx/Maintenance (I’d prefer 15% but I’m ok with this giving value add opportunities I've identified) Offer 1 – I want to show the seller what their ideal deal looks like with their asking price and how it doesn’t work with traditional financing that creates negative cashflow for buyer.Purchase Price: $400,000 Down Payment: $80,000 Loan Amount: $320,000 Loan Payment: $2,292 monthly (bank with 6% and 25year amm.)

Lower end properties are more susceptible to extended vacancy, more likely to require evictions, higher turnover costs, etc....

ROI is lower with cash. 

If there was no out-of-state money, housing prices would be lower in many of these markets.

The general rule is that the more passive the investment, the lower the return.

@Nate MorrisIt would make sense that the deal may need to be included in a separate sale.Generally when purchasing property, you want to weight more of the value into items with lower depreciable lives.

He is going to pay 10% for 6 months so that he can get a lower rate after he pays 3k or 4k in fees AND closing costs and then pay all the fees and closing costs again in 6 months??

This means you must lower your standards even for a C class property.

Organic loss to lease would be any losses in potential rent due to the natural lease up cycle, meaning if rents are growing in the market, then leases dating back 11 months ago would be renting at a lower rate than market but this doesn’t necessarily mean the property has under market rents and a strong opportunity to increase rents.

if you're doing a cash out refi you're looking at 75% LTV so you should be able to pull out $63K if you wait 6 months seasoning and since it's a refi your costs should be much lower.