Make sure that you keep the purchase AND rehab to a max of 70% of After Repaired Value.

All the roofers that come out only want to replace it and not repair it, because they don't want to "ruin their name" by repairing it and it leaking again.

Rented immediately for $600/mth, ie. 12% nominal yield after painting to remove the smoke staining, and some kitchen repair.

But, over time, large numbers take over and it will settle to around 50%.The people who get into trouble using this long term view of expenses are the ones who are doing short term deals.For example, you buy a building based on estimating the expenses at 50% but six months after you buy you are force to repair a failing foundation.

I believe she is a month behind, owes 2100 in taxes for 2007, property just needs minor repairs, payment is about $1200/month at about 8.5% interest.

The rental got some repairs done today, and will get a bit of paint.

A few things you'll like to know: What was the source of the water damage, is it dry,was it repaired, and was the damage properly addressed according to industry standards (S520 standard andreference guide for professional water damage restoration).

Nothing has blown my doors off yet since my limit is only $90k but I am also considering starting a small computer repair/rebuild business.

When I call (professionsl) people to ask about repairs, they usually ask if the place is a rental or my home.

If you plan on holding the property for 5 years, and renting it, then yo should be fine, but it sounds like you are after a quick-flip, and that would be extremely difficult.If you buy, and then re-sell within 90 days, then almost no appraiser in CA is going to appraise the property for anything above the previous sale price, unless you can provide proof of funds that went toward repairs or improvements.