I usually fund repairs and put about 10k into the purchase to show skin in the game.  

I would also make sure that I add in extra cash to the deal so I have a healthy starting reserve as the property wouldn't have cash flow for the first few months. 

Commercial real estate investments can offer long-term returns that are both healthy and stable.

If you don't have any capital at all, it will be hard for you to even do syndications, as most investors will want you to have some skin in the game.

So the cert buyer gets a day or two of interest, it's part of the held-back funds and no additional skin off your nose.

Also,if you on sticking around BP, get a thicker skin.

It does however appear that you would have some equity built in since you are putting 20% down about 18K and also I assume paying to fix it up which means you would owe 74K on a 135K house when its all said and done which is pretty sweet for a first deal.All that being said lets look at the rental info (again I am assuming your numbers are correct-so make sure they are before buying it)Rent = 1400*12= $16800/yrExpensesSo for expenses what I do is assume 10% vacancy and 8% management fees you may manage it yourself and save that but you should plan on it in case at some point you dont want to manage it any longer plus you need to get paid for your time.  18% of 16800 is $3024 per year, typically I assume 5 to 10% for maintenance but since you are budgeting renovations I think the 5% is probably good which is another$840/year so that leave us with thisExpenses = $3024+840+$3000 (taxes) + $1200 (insurance)= $8064/yearWhich leaves you with $8736 with which to pay your mortgage ($728/month) assuming you have a 30 year amortization schedule at 5% your payment would be just under $400 per month leaving you about $328 cashflow per month For a total return of $328*12= $3936 per year on an investment of 18K (down payment)+12K (reno) = 30K3936/30,000= a very healthy 13.12% cash on cash return and you will also be paying it down over time so I would say if you like the area and are comfortable with the numbers go for it its a pretty solid deal!

The real estate market also goes through ups and downs, and that's HEALTHY.

Perfectly normal, the sellers want you to have some skin in the deal, in case you simply walk.

.$125,000 is a healthy amount of income to be earned in the flipping business and there should be some self-employment tax saving opportunities by forming an entity to be taxed as an S-corp