Hey Danny,I think you're messing up some numbers above.For the conventional loan and hard money scenarios, you need to subtract your debt payments from the $5400 before you calculate the COC.For the cash purchase, your gross income is $10800, but your cash flow after expenses is only about $5400, so your COC is actually half what you indicate.In reality, the returns on this deal are considerably less than you've calculated in your scenarios.

In fact, you could go new, with an extended warranty on the washing machine to hedge your bet.

I would bet this building has 15,000 square feet of hard to utilize area -- warehouse space in primary retail area, second floor area, back lot, etc.

Id bet you money this isnt going to happen and is a waste of your time.

What percentage do you typically use when calculating these costs?

And knowing prices in many other areas, I don't think this is unreasonable in many parts of the country.But again, it's going to differ based on several factors and getting several bids is the best bet...

They are hard on the rentals, not to mention waiting for +40 years for an investment payout on a nickel and dime bet on housing in a very poor area is not a good investment strategy.

Dave,For your calculations, the original house has been a rental for 20 years.

List price means nothing when calculating an offer, in my personal opinion.

It is important to consider your option and perhaps even your risk on an unsuccessful option into the future into your calculation.