Here are the stats:Purchase Price: $40,000 - Appraisal: $34,000 - Down Payment: $12,800Current Rent: $600 & $475 = Total of $1075/moVacancy Factor: 1 month ea unit (-$90/mo)Mortgage: $180/mo (Only $27,200 based on appraisal)Property Taxes: $65/mo ($800/yr)Management: $65/mo (6%)Gas & Electric: $0 (Tenants Pay)Insurance:  $55/moWater/Sewer: $70/moMaintenance: $80/moReplacement Costs: $105/moTOTAL INCOME: $985  TOTAL EXPENSES: $620  CASH FLOW: $365/moClosing Costs: $700Return on Investment $365 x 12 / $12,800 + $700 = 32.4% ROIInstant Net Worth Loss of $6,000The appraisal is fairly low as there are a lot of cheaper single family houses in the area and this is technically only a 2 bedroom house.

@Eric MunsonInspection came back pretty bad. 1 furnace was over 30 years old, electrical conversion was all done incorrectly, rear addition is pulling away from the house and on and on.

The first sign of Chinese drywall is a black looking soot around things like electrical outlets, wires, plumbing fixtures, etc.  

Also took all ceiling fixtures and registers down to prep for painting ceilings.Sunday- finished replacing electrical outlets.

This past winter my electrician got to a house on a Friday and set all his boxes , ( the customer was in a "rush" to get the house done )  Monday he gets there to pull the wire and he is on the floor laughing , he calls the guy flipping the house and tells him " chief you have to slow down a bit , screw ups cost you money "  Oh by the way , the electric , plumbing and insulation  go in BEFORE the drywall .

Not fun.Then there was the one REO where the electric was on while the bank owned it; that is quite the oddity in that area.

The electrical switches looked current and there is a AC unit in there. 

As long as you aren't doing electrical work and plumbing, which have code requirements you should be good to go!

We're a year in on it now and I've had to replace the electrical panel (thanks insurance company) and had a small flood which required about $500 of new flooring.  

Electrical work- install about a half dozen GFCI, fix a splice that doesn't have a junction box, and correct a double tap in the breaker box.