For this purpose, just divide the annual net operating income (50% of gross rent) by .09 as the high end, divide NOI by .11 as the lower end of your potential range.Also, ask an agent to do a BPO/CMA to provide a point of reference.

Assuming you can find a bank that will finance under $50k at near prime rates, you're looking at $190 a month in debt servicing.Cash Flow = $5,400 - ($190 * 12) = $3,120Cash on cash return: $5,400 / $17,800 = 0.30CoC = $3,120 / $17,800 = 17.5%CASH - Purchase: $47,000Repairs: $5,000Closing Cost: $750Inspection: $300Total Expenses: $53,050Cash on cash return: $10,800 / $53,050 = 0.20Your NOI doesn't change based on financing (expenses are not correlated to financing choice though I guess you could in theory not carry property insurance with a cash purchase).

Hopefully I'll end up giving them a good reference as tenants, and visa versa.

And I too, have thought this was more of a lifestyle choice than a good investment, but now Warren says to do it...http://www.forbes.com/sites/janetnovack/2012/01/27/warren-buffetts-advice-to-a-boomer-buy-your-sunbelt-retirement-home-now/http://www.forbes.com/forbes/2011/0627/money-guide-11-real-estate-gallagher-nar-vacation-retire-later.htmlWhat do you think, would you do it?

Joseph M Thanks for the reference on oakland, i plan to read that tonight, and Jake Kucheck, you are exactly right, while I 100% believe that it is a sound investment, I think im more driven by the fact that i have an opportunity to make an impact and leave my footprint.

-Steven the Tax GuySteven, Please refer to the following excerpt from IRS Pub 523.

Ask for references!

I'm referring to the beer can house that was featured on national TV about a year ago. http://www.beercanhouse.org/about.phpI wish it were the same story just down the road in Jefferson County.Best of luck!

Will you share a reference(s) from your current client who runs a business similar to mine?

The last company I used basically used a generic word doc and it wasn't a very helpful reference.