Thanks,George  (from Ypsilanti)Besides the Cash on Cash of 15%, I want to see not less than $3,000/year in positive CASH FLOW per unit (for SF and 2-4 units) and it has to meet these criteria as-is; that is at current rents and accounting for any improvements I plan to make which may result in rent increases.I am pretty conservative when estimating costs on properties I buy.  

I am a pretty conservative person so I probably over saved.

I have been told it could be a few hundred dollars or up to possibly 5 thousand if the entire yard needs to be ripped up.I ran the rental numbers on this and being really conservative it looks like I could offer 55K and still have some extra wiggle room for this gas line issue. 

I think this place could conservatively gross $70k/year if the units were updated. 

The 50% rule is very conservative and using it will shed off a bunch of "bad deals", but in operation, the 1040 Sch E will declare the true expenses and you'll get better numbers. 

I want to be conservative but at the same time not take forever to build wealth.3) What systems do you have in place to handle the tenant in their problems?

If you have a conservative rent target and include things like capital expenditures, taxes, etc. you should be in great shape.Warning, being this highly leveraged means that it will be more difficult to refinance unless you are buying at a steep discount.Tip, obviously you can record the private loan as a second mortgage to make the private money lender more comfortable.

On the one hand, institutions are pulling out and moving to more conservative positions.

Property is vacant right now, the total rent of $5400 is conservative based of a market comps, realistically it will probably rent out close to $6000 a month.

But, am I looking at this too conservatively, considering that by the time we rent the home, we will already have equity of at least $13k from paying the mortgage from the year we lived in it?