How does this look for the 6 unit if purchased at $150kFinancing InformationPurchase Price $150,000.00Cash Invested $30,000.00Loan #1 Amount $120,000.00 Interest Rate 6.00% Monthly PI $773.16 Term in Months 300Property & Depreciation InformationLand Value $0.00Personal Property $0.00Building Value $160,000.00Personal property depreciation $0.00 at 20.00% depreciationBuilding depreciation $5,824.00 at 3.64% depreciationTotal Depreciation $5,824.00Gross Operating IncomeAnnual Rent $42,000.00Less Vacancy $2,100.00Gross Operating Income $39,900.00Annual ExpensesReal Estate Taxes $5,700.00Utilities $13,500.00Insurance $1500.00Maintenance/Repairs $0.00Advertising $0.00Admin/Legal $0.00Supplies $0.00Miscellaneous $0.00Total operating expense $20,700.00Operating expense ratio 51.88%Tax and Appreciation RatesTax bracket 35.00%Appreciation rate 5.00%Cash Before TaxesGross Operating Income $39,900.00Operating expense - $20,700.00Net Operating Income = $19,200.00Annual Debt Service - $9,277.92Cash Flow Before Tax = $9,922.08Cash After TaxesNet Operating Income $19,200.00Total Interest - $7,141.88Total Depreciation - $5,824.00Taxable Income = $6,234.12Tax Paid or Saved $2,181.94Cash flow after tax $7,740.14Rates of returnTotal appreciation $7,500.00Return on Investment with appreciation 72.47%Return on Investment without appreciation 47.47%Cap Rate 12.80%Cash on Cash 33.07%Just got back from inspection, everything is solid, inspector sees roof work in 10yr, minor plumbing, new water heater soon, nothing major.Need some advice.

I have totally rehabbed homes here in Indianapolis that are already rented.

In Indianapolis the water and sewer is being sold by the city to an outside company which would mean there would not be any city owned utilities for my properties anymore so it would be nice if that also prevented the liens.

And it seems by the time you've corrected the latest code revision, they change something else.Typically, I'll see what a good home inspector has to say.

This is why I avoid houses with a lot of unpermitted work, unless it can be easily cleared up on the phone with the inspector...having said that a lot of people don't seem to mind these additions, and see having the extra room(s) as an advantage.Vicky if you don't already have one, you should try to find a very hard-nosed home inspector in your area for your next REO.

Make sure you get a home inspection and show up when the inspector is out there.

She will have to allow you and/or your inspector inside sometime.

What I was saying is that any conventional or standard FHA loan will require an inspection, and if the inspector finds any issues with the property that makes it not move-in-ready (for example, non-working appliances, the roof problem, the septic issue, etc), the loan will not be approved.

So, if you don't have a good eye for assessing such flooding risks, regardless of what the maps say, I'd suggest you first ask an inspector to evaluate the area during inspections (if that's what you usually require and don't do them yourself) or get a spot elevation and comments on the area from a surveyor.....if you are concerned about flooding.

:D Real Estate Investor - Any of several unemployed individuals who spend the majority of their day painting and cleaning properties, staring at their computer monitors looking for deals, or talking on the phone to countless agents, contractors, lenders, etc. all for the express purpose of avoiding a "real" job.Tenant - A sub-group of life form that neither understands the basic fundamentals of cleanliness or operating a simple traditional stove top without causing over $500 worth of damage.Landlord - A multi-millionaire dollar narcissist who owns a phone that apparently never rings, an e-mail account that never receives, or a mailing address the post office never delivers to.Buy & Hold Investor (cash-flow) - A landlord who realizes after acquiring, rehabbing, and leasing several dozen properties, that he still doesn't have enough income to get off food stamps.Buy & Hold Investor (appreciation) - A speculator who holds onto his properties for several decades with the ultimate goal of making his great-grandchildren very wealthy.Note - Various discrete elements that make up music.Points - The sharp end of a nail or screw.Hard Money Lender - See "Loan Shark".Paint - An opaque viscous substance that exhibits the following properties, 1) costs far more than one would expect, 2) never looks the same on your wall as it did in the store, 3) covers half the area stated on the can, and 4) will only clean up with "soap and water" provided you add bleach, acetone, and sandpaper.Wholesaler - A mysterious sort of creature that makes large expensive purchases despite having no money whatsoever.Flipper - An overly dedicated individual who spends 2 to 3 months renovating property for a profit only to find they averaged $1.25 per hour.Motivated Seller - A rare and endangered species that has been hunted to near extinction by various investors, wholesalers, flippers, etc.Lender - An institution possessing a large quantity of capital not available to the public as there is more profit to be made in bank fees than mortgage interest.Asset Manager - An agent of the bank that couldn't tell the difference between a house and a shoe box.Foreclosure - The process a bank uses to seize a property from a homeowner and sell it for a loss rather than modify the loan and make a profit.Multiple Listing Service (MLS) - A large compilation of homes no longer available.Realtor - A member of an organization of real estate professionals open to several people who don't know anything about real estate.Bird-Dog - A motivated go-getter that performs 90% of a Realtor's services for 10% of the cost.Fixer-Upper - A term used to describe a house that only needs new paint, new carpet, a kitchen remodel, re-piping, re-wiring, several major structural repairs, and a foundation which requires a team of seismic engineers to fix.Turn-Key - A term that describes a "fixer-upper" (see above) that has been completely repaired and is available to an out-of-town investor for 20% above prevailing market rates.Contractor - A member of a special fraternity that shows up at your property to collect a check and at no other time.Appraiser - A professionally licensed individual with a tape measure, clip board, and camera who spends hours compiling a 30 page report telling you something you already know.Home Inspector - A guy with a ladder and flashlight who charges you $250 to inform you that you really need to speak to a licensed contractor (see above).Plumber - Somebody who gave up their medical practice in order to triple their earnings.Real Estate Guru - Somebody who gave up their plumbing business to triple their earnings.Bootcamp - A place would-be real estate investors go to part with the cash they could otherwise be using to purchase real estate.