(too many bad memories) She said that she had talk to a few people about selling the house but stopped because they seemed "sleazy".

Tax lien certificates you get a certain rate of return like you said (16-24%).

And always ask for a card in return, whether the person you are talking to is in the real estate business or not; it is good business karma and making a habit of it will lead to some pleasant surprises.

You now have about $12K invested in the property, if you include closing costs on the loan.You rent the place for $1050/month, and assuming an 8.5% vacancy rate (a month a year) and expenses of 40% of net income (a little low, but okay since you just rehabbed), you should see the following returns:- $40,000 in total equity created from the property ($120K valuation minus $80K loan)- Year 1 Cash flow: $862- Year 1 Equity Accrual from Payments: $894- Cash-on-Cash Return: 7.43% (not including equity generated by rehab)- Total Return: 15.14% (not incl. rehab equity or tax benefits, which are investor dependent)- Total Return Including Equity Generated by Rehab: 347%If you choose to keep the property for longer than a year, your total return will obviously drop, but you're still receiving nearly $1000 a year in cash flow, $1000 a year in equity, and still have $40K in equity generated by the rehab.Rinse and repeat...

So it is just a return to a saner banking climate.

You have to strike a balance between the better financial returns of lower priced houses, versus the more intensive management they require.

- How does additional leverage help your COC return?

Hopefully, in a year or two, the lending market will open up again, allowing more retail buyers to enter the market for a better return for you.Also, make sure you investigate what Jon said about number of homes for sale (and for lease) in that community.From the outside, it looks newer and clean, but the inside needs to be inspected by you and a pro to acquire repair estimates (if necessary).

Thanks (with a returned chuckle)2.

Alternatively you could fix and flip some properties then reinvest the profits in rentals, although putting a down payment on a rental will dilute the returns, so this option is only second best to buying rentals that cash flow with no money down.Hope this helps...