It may sound like a lot, but in the event of a total loss (fire, earthquake, etc.), you'd be surprised how rapidly you'd go through that $60,000 trying to restore the "walls" to their former glory.

I'm a total newbie and just trying to understand the process.

My asking price was $2000/month, and the divorced mother asked if she can pay me $1090 on the 1st and 15th of each month for a total of $2180/month with a $2500 security deposit.I told my bad tenants

I want to add some examples:There is a house in the orange county area that is 350k 3/2 that can rent for at least 1500/mo while a duplex can be found in a similar area for about 350k where both rents can total 1800-2000/mo.

George,I totally agree with you that tenants should be treated well.

So twelve bed rooms total and I'm pretty sure 6 baths.

Are you talking about equity or total levered RE?

(this is usually NOT the best course of action)All the attorney will do is hire a collection company that has more bark than bite and rarely collects any money.The other option is to use a judgement recovery company.They usually pay the court costs and filing fees and then split 50/50 of whatever they recover.Sometimes they will buy the judgement outright for real cheap.In this case you get your cash right away and move on.Judgements depending on the smarts of the tenant can take 3 months to years to collect.Some tenants are judgement proof.This can happen when:1.The funds are retirement funds in a bank or social security where money can't be taken.2.The tenant works a job where their income is at a level where they cannot be garnished by Federal Law.Even when you can garnish you can only take 25% each time.If their are other judgements already garnishing then the 25% gets split up among the garnishments.85% of judgements never collect a dime because of the work involved.Even if the judgement company you employ chases the tenants for money the tenant may pay or they might just file BK if they have other debts.A chapter 7 costs thousands so it would depend on their other total debts and how much your judgement is for.This is why it is important to carefully screen tenants.They need to have good credit,a good job with long work history,etc. or something where you know you can collect if they default.If you have multiple tenants staying in one place and they all make minimum wage it will be hard to collect on them later versus one person showing great income.Hope it helps.

The kit homes seem to be about 25% the total cost in materials and labor.

Title company called me 1 day later saying there were 2 liens on the house totalling $51,000 - both the seller did not know about.