As an agent, or flipper or wholesaler or operator, the income is 'active'.  

Becoming an agent has costs to operate Day 1 which includes: additional car insurance (required to drive people around), licensing fees, dues (state and national), fees to operate a Supra key, to be on MARIS (MLS), prepaid legal fees, etc.

I would not have bought this to be a rental property, since the numbers don't make sense.The risk of renting it out is that the house condition continues to worsen faster than we can afford to fix it, or yet more problems are found.  

I do a lot of write offs through this and one thing im curious about is how i can structure house / flipping & rentals in my business.I plan on continuing to work in the industry i am in due to the flexibility and earning potential... on good years i will very likely be able to earn north of 350-400K and still have 4-6 months I can dedicate to REI.  

I wish you continued success.

My company is local and operates 500+ properties and we wouldn't even touch something in that range.

He formerly operated Master Contracting, LLC but closed it down due to several lawsuits for fraud.  

I spent 25 + years in residential construction operations making money for my bosses.

I personally operated, managed and was part of a grounds up storage development.

I tried to include all the pertinent information below:Rental Income: $13,200Rent: Currently has a tenant on one side at $550 per month without a lease – I’ve made it a condition of the sale that the tenant has either signed a new lease with my property management company or delivers that side vacant; other side is not rented out due to required rent ready repairs; rental comps in the area show between $550-600 (I’m being conservative and assuming $550).Expenses:Vacancy: 10% ($1,320)Property Management: 10% of gross rents ($1,188)Property Taxes: $2,065 ($905 for City of Memphis, $1,160 for Shelby County)Property Insurance: $450 per year Repairs and Maintenance Assumption: 2% of Property Value per year ($980 per year)Utilities: separately metered; all paid by tenant except for lawn mowing at $25 once a month for $300Advertising: 6% (roughly ½ of first month’s rent) $792 per yearDebt Service: Based on $49k purchase + repair price, 20% ($9.8k) down, 5% 30 year fixed is $2,525 per yearLocation:This is probably where most of my concern is coming from: Western edge of Hickory Hill, Memphis, 38115; major cross streets: just SW of Clarke Rd and Winchester RdAcquisition:Purchase Price: $42k, seller to pay closing costsRepairs: $7.5kTotal Acquisition Cost: $49.5kARV: Large range of comps in the area, best guess is $60kFinancial Metrics:Net Operating Income: $6,105Cap Rate: 12.33%Cash Flow: $3,580 per year, $298.33 per month, $149.17 per unit per monthCash-on-Cash Return: 36.5%Do you think it's a good deal?