Bryan,You should throw this rule out the window as in most cases it is impossible to achieve anymore.  

Sometimes I'll throw a little more in there and sometimes I have to cash in a favor with a tighter budget.

FYI, throw the 2% rule out the window. 

The old guy was green as can be but everyone just assumed since he was older that he was in charge so my teacher used him as a front to get credibility.He found students that wanted to live off campus and convinced them, and their parents, that it was a better deal to buy a place then to throw money away on cent for 4 years.  

But... if the right buy-and-hold is there, I'll throw down the 20% plus repairs, and hold it.

Not trying to pour water on your dreams rather throw out some reality to whats happening. 

Looked at tons of places before I felt comfortable with the numbers, property, location, etc...I agree that the deals are scarce and it is better to hold on to the money for an extra month or 2 than throw it at something that will make you lose thousands of dollars over time or more. 

The cost of the average renovation in SA is around $20k - $40k and the retainer for an attorney on a case like this is $around $10K - $20K upfront, win or lose and if your Bob hides behind an LLC, you can can throw in the towel right now, or if he files bankruptcy to get out of the judgement, then you get nada.

Most wholesalers are going to see your situation and will throw you "deals" that will end up eating your funds away just to get them in rentable condition.By the way, Arian, how many rentals do you own?

Me and a business partner are in the process of forming our LLC, in Dallas Texas, which will own all properties we buy and hold in order to build equity.Due to low investment capital up front, we were throwing around the idea of my wife and I applying for an FHA loan, in order to take advantage of the low down payment, and possibly transfer this property to our LLC.Is this something that is done regularly?