But you should still include these costs in evaluating the deal.

On a standard purchase you would evaluate the property using the NOI and cap rate, but that factors in the purchase price.

As far as your market goes, you should stick close to home in the beginning until you have the confidence to evaluate an investment properly.

., at that point I can re-evaluate the value of the property and adjust it with the new tenant.I was running the numbers on the next property I want to purchase, and using a similar scenario as this one, (assuming I purchase the property for 5% below appraised value) with 20% down, on a 24-month contract I'd still make about 70% return WITHOUT the 2% increase (closer to 100% with it).

Different investors use different metrics for evaluating a deal such as cash on cash rate of return, monthly cash flow, internal rate of return, etc.

That being said, we would need to know the offer price on the property to evaluate the surface before digging deeper into financing options, assuming primary the analysis makes sense.

How would I evaluate a property of such?

They'll evaluate all potential tenant/buyers first.

Call them and inquire if they in fact will be the listing agent, if they have performed the BPO yet, and when they estimate they will place it on the MLS.If they are the list agent, now you have one of your answers.Prior to caling them, pleae make sure you complete your due diligence and evaluate what the current market value of the home is in its existing condition.

Then, have them re-evaluate your budget by submitting a revision and ask them to adjust their numbers.Good Luck!