So I exercise the option and let the purchase agreement become the controlling document and then escape from there and get my money refunded.Weasel clauses are often poorly written and the courts have ruled many as constitutionally vague, and thus the clause is ruled as unenforceable and your still on the hook .I saw a few on this site today that I said to myself good luck on that.

May be a much better option for you with more control, less rules, and more advantages than a SDI.

Justin,One of the rules that is often talked about is the 50% Rule.

Look into the 50%/2% rule on this website.

Just starting out with BP, but thought this would be an interesting post to start out with... 1) 97 Days from Acquisition to Flip Closing Purchased: $28K +Rehab: $28K +Interest to investor: $5K Sold: $100K -Realtor: $6K -Concessions: $6K ---------------------------- Net: a little over $26K 2) 105 Days from Acquisition to Flip Closing Purchased: $54K +Rehab: $6K +Interest to investor: $8K Sold: $100K -Realtor: $6K -Concessions: $6K ---------------------------- Net: a little over $22K (had to rent property due to FHA-90 day rule--made an extra $1K from it) 3) 32 Days from Acquisition to Flip Closing Purchased: $28K +Rehab: $0K +Interest to investor: $500 Sold: $35K -Realtor: $0K -Concessions: $0K ---------------------------- Net: a little over $6.5K REOs are fun when you can get good deals.

I understand a good rule of thumb, if I were to rent is about 1% of the purchase price.

If so, throw in another 10-16% for your expenses.As a general rule of thumb, many investors assume that total expenses (including PM and vacancy) will account for about 45-50% of income over a long period of time.So, if your GOI is $1274, your NOI is somewhere between $570 and 640.

A $60k investment does not have $1400 in PITI.Second, if the total rents are $1200 and you buy at $60k, you have obtained the 2% rule which will gurantee cash flow if managed correctly.

What it has done, is created a hardship for honest investors like ourselves.I don't invest in New Mexico so don't know the laws and rules there, but I would ventire to guess you can do them, you just need to make sure you follow the proper protocol.Perhaps some NM investors can chime in.

Jason,Under the new 121 rules you can still convert your primary residence into an investment property, then sell it two years later and still be eligible for your full capital gain exclusion.