And I have another one in the works where my total rehab costs will be about $500.

All in all it cost about 30k in materials and the labor for the upgrades (sheetrock, carpet, lights, bathroom, kitchen, windows, and appliances) and the person that we are working with did it for a very reasonable cost about 8k total due to the fact that he got a commission on the front end and also on the sale end.Then we listed the house in August and it sat then sat some more.

@Drew MacDermott - There are a million different ways to structure the beneficial ownership, but I can start with an example of a deal I'm doing right now with a total of 3 partners.

My total expense including everything (mortgage, tax, maintenance,property mgmt company) is 1500.

I have 'partnered' with some friends in the past, but their only contribution were loans, they had no interest in the real estate.I currently own three buildings (five total units).

The 1% rule (or 2% rule) is a calculation of the amount of monthly rent as a percentage of the total purchase price.

And, I think, it totally makes sense.

At this point I’m totally hooked, and am looking to start investing.My goal is to replace my income with rental cash-flow in the next 5-7 years.

On a more positive note, we stuck a sign in the yard and got tenants who qualified and signed a lease - for $20 more than I had originally planned ($515 total for the basement apartment to a nice young couple.

.$280K$56K downP&I: $1200.00$2700 Total Rents - 50% rule = $1350.00 - $1200P&I = $150We've also broken the 50% rule down further with what we believe to be more accurate numbers:TAXES: $279INSURANCE: $279 (This is estimate as I wait to hear back from ins. agent)VACANCY 10%: $270REPAIRS/CAP EXP: $162PROP MANAGEMENT 10%: $270 (We'd be managing but have this built in for the future in case we didn't want to manage)Total: $1260.00$1260 + $1200 P&I = $2460.00Total Rent: $2700-$2460 = $240 cash flow.CAP RATE 6%GRM 12CASH on CASH 5%We realize that this isn't a great performer overall.