[quote=spdrun]There were houses in Deer Valley selling for $80k that would be usable with $20k of renovations. They’d rent for $1300/mo, minus $200 for taxes, minus $100 for insurance, tenant pays utilities. That’s 12% pro forma cap.[/quote]
Go for it. Only an extraordinarily naïve investor would think they might get 12%. Water bill is hard to get into a tenants name, most public utilities will only bill the legal owner. You want to trust the tenant to pay, go ahead. Gardner? You want to trust the tenant to mow the lawn and take care of the landscaping, go ahead. Dreamers think they’re going to get 100% occupancy. Almost never happens, specially in the year of purchase. I rented a house in SD from 2006 to 2011. I was the exception. Shit happens. Sometimes there will be a year with no repairs or unexpected costs in a rental house. Not often. If you’re lucky, they’re small.
