Whats the condition of ventilation, exterior, toilet seal, walls, floors?

They are built in sections ("modules") in a factory in controlled conditions (no rain, sleet, wind, sun, etc.).

Finally, I met with him in person, saw the property and it is in great condition.

You will be looking at recognizing the increase now as opposed to later.

In most investing scenarios, even outside of real estate, as the risk increases, so should your return.

This allows me to do a 1031 exchange and get into newer properties with better tax advantages (once I have used up most of the depreciation from the previous rental), and it allows me to never deal with deferred maintenance issues that increase my cost of ownership.

Never mind the fact that there are a whole lot of people looking to buy a property (increasing by the day) to live in themselves.From what I have seen, most MLS listed duplex properties in Denver (and most other properties, too) are at a purchase price that would put you so far away from the 1% goal - it would be impossible to cash flow them now or in the near future. (1% being the rough guide for considering a property, rent/month is 1% of the purchase price of the property).

I called my personal real estate agent and they are unlikely going to be able to underwrite the house as its current condition is "below average."

Let's rounded to $400/mo/unit to simplify the numbers.That is an income of $1600*12/yr from rent ~= $19,200Now, expenses:Maintenance: $9,600/yr (50% rule)Taxes: Around 1% ( lucky New Mexicans): $1,700/yrMortgage Payment ([email protected]%): $763/mo ~= $9,150/yrInsurance: Around $1,000/yrPossible Cashflow per Year: 19200 - 9600 - 1700 - 9150 - 1000 = (-$2,250)A negative cashflow does not look so good, but here are 2 opportunities to increment it:1) Increase rents.

I tend to think the economics in the South Bay are strong for this strategy but my thoughts on that may differ from yours..Due to high home costs our local market, investors struggle to maintain cash flow under standard lending conditions/structures.