I think that note is also going to need a significant discount to account for its long term, it being underwater and it being so fresh.

The seller is giving a discount because there is a deadbeat tenant in the property without a lease, not paying rent and does not want to deal with it.How hard would it be to get a tenant out after I purchase the property? 

The buying at a discount game is not about finding houses so much as its about finding situations you can fix with a win/win solution.The more you can tailor your offer to their needs, the more successful you'll be.

ARV is $120k, I told him he could probably get $65k, but I wouldn't be a player at anything over $55k.I should take pictures, the SFH had not been trashed out yet, uggghh it was disgusting, but it seemed very solid and the kitchen was not to bad.Nothing better than having a good realtor who knows I'm a straight shooter who pays cash.

Will,To get a straight answer you should visit a lawyer who understands the lease option's law because most on the Internet are just guessing, and most will shove the Dodd-Frank act down your throat without knowing how it will work in 2014.

I actually think there is a lot of opportunity here if you properly account for all the deferred maintenance and purchase at enough of a discount to compensate for poor management.I have tenants that don't speak any english, and while communication is certainly a challenge, it isn't something that can't be overcome.

Only thing is you want to make sure its an old MLS since those are likely deep discounted properties.

*Finance Expenses$50,000 Purchase Pricex 65% LTV$32,500 First Loan@ 4.75% (5/30-year Mortgage)$233/month Principal, Interest, Taxes & Insurance (PITI)*Operating Expenses:$800/month Proposed Rentx 75% (to discount for vacancies, utilities, etc.)$600/month "Discounted Rent"$600 Discounted Rent-$233 Mortgage Payment (PITI)-$235 HOA Dues$132/month Positive Cash Flow

I'm picky, though, you can market to the people that dont know any better and make more money.Anyway, the whole reason I chimed in was to point out that you are asking what discount to market investors look for and Brian answered with an ROI, which is what an experienced investor will do.

Vacancy here low 3% so thinking it is rentable w/o garage with a discount.