The offer I received below: Loan Balance: $105,000.00 Loan Interest Rate: 5.00% Loan Term: 1 year Monthly Loan Payment: $8,988.79 Number of Payments: 12 Cumulative Payments: $107,865.43 Total Interest Paid: $2,865.43 Note: The monthly loan payment was calculated at 11 payments of $8,988.79 plus a final payment of $8,988.74.Thanks in advance, Pat

That said, there is certainly a brief period of overlap with insurance when LPI is placed and a borrower finally obtains a policy.  

I've done a lot of listening about it on the sidelines and finally decided to make an attempt based on conversations with other investors.

I want an air tight transaction and will have an attorney review and give me their seal of approval once I feel like I have thought of every possible negative outcome for myself.So far the possible negatives I have been able to think of are below and my intended solution will follow:Dodd FrankFinding a tenant without a license (I would like to market to those who have high days on market)facing penalty for performing broker transactions without a licenseI would market, find motivated seller, let them know that I can provide them with a cash offer, they can sell with a realtor (pay the commissions, spruce up costs, holding costs, etc.) or they can sell on lease option and get someone better than a regular tenant in the home.I would use standard docs specific to my state but they would be modified to include the below:Letter of IntentI would have them sign an intent to sell where in it, it would state that the property will be purchased via an option and the option will be in the name of a land trust.it will state that I as an owner and friend will be allowed to assist in the finding of a tenant, negotiate the lease terms, and be allowed to show the property without any compensation and at my own expense.LeaseMy lease will have verbiage stating that the tenant will be responsible for repairs, and normal up keep / wear and tear associated with the property up to $250 (this is my benefit I sell to the seller so that they don't have to deal with every tiny little tenant issue.Tenant will be responsible for all utilities and they are to be in the tenants namewill be allowed to extend twice, each for a period of 12 monthsTenant needs to inform owner of extension no less than 30 days before lease expirationthere will be no mention of the option within the lease, PITI will still be owners responsibilityWaiver of Liability associated with LeaseI will have a document created stating that the owner is solely responsible for the final approval, screening and placement of a tenant and that there will not be any recourse for myselfOptionFor the consideration of $1 (with receipt from trust to the owner) the trust will have the option to purchase the property no later than 45 days after the expiration of the lease.The purchase price will be agreed upon within 5 business days before or after the date of the lease expiration and if both parties are unable to agree upon a price, the owner and trust will each get their own licensed appraiser, average the two out and split the costs.this will be an option / right of first refusal hybrid and will very clearly lay out the expectations that there will not be any seller financing, the transaction will be in all cash or if the beneficiary of the trust so decides to get a loan from a reputable / licensed lending institution they need to provide a pre qual letter within 14 calendar days of the lease expiration and mutually agree upon a closing date.I would then sell my beneficiary rights to the trust for $5k, and exit the transaction.

I finally settled on a reserve fund of 4% of total asset value.

The Final Tangible Property Regulations and the three safe harbors and BAR test that comes with them4.

At the age of 19 I'm finally putting what I've learned to use.

I have never seen a good deal left on the table because of lack of a buyer.So, you may want to reverse course and start with finding a good deal, then another and you will be well on your way to REI success.In the interim below are some links to catch up on.http://www.biggerpockets.com/starthere http://www.biggerpockets.com/ubg http://www.biggerpockets.com/meet Setting up Keyword Alerts How to Use @Mentions on BiggerPockets 25 Tips for Real Estate SuccessREI can be very daunting, but, before you go searching for that 1st buy, please take a few minutes to bone up on the tips in link below.http://www.realestate.com/advice/buying-your-first-investment-property/ However, this site thrives on interactions and as such we encourage two way exchanges and look forward to educational and thought provoking ideas relevant to REI.

Finally, since CAP rate is used to compare cash flows - properties which are valued based upon the income they produce - it is not really a useful metric for residential real estate which is valued based upon comparative sales.Cash on Cash is a related ratio which takes into account leverage.  

The tenant was in my unit for 7 months and it cost about 10 k to finally evict.