I'm new, to the site and to social internet mechanics (forums) as a whole, so please forgive me if I put this in the wrong place or something.

Here is the deal:

Current offer $54k (1st offer was 49k)

1570 sqft house

Built in 2007 by Hunter homes. (Think really cheap with open floor plans).

Corner lot, no fence, needs paint (in and out), outside trim repair, curb appeal, and carpets cleaned.

Qualified for Homepath.

If your not familiar with Homepath, for investors, you only need 10% down, No MI, no appraisal, and they are authorized to pay up to 2% toward closing. Of course this all comes at a cost of ~1.5% higher APR than a 25% down conventional.

The neighborhood is 1/2 investor owned or in foreclosure. I'm planning to build a fence, due to the rough look of the neighborhood and it being a corner lot. The average rent is $850/month for that size house in this neighborhood. Only one house not under contract, but my realtor says the PMC is horrible and most realtors avoid them.

As it stands now, I'm in violation of the 50% rule and the 2% rule. With P/I,tax,&ins I'm looking at $250 left over for maintenance and profits... Granted, it's a new house so I don't think I'll have any big expenses coming up for a while. But I don't see how I could find a property that would meet the 50% or 2% rules.

Please tell me if I'm being too conservative or if I should be concerned.

Thanks,

Jim