Some investors are happy with a 5% return (it's better than a CD and most likely very safe) some wouldn't look at a deal unless it had 18% in big red numbers written across the top.

Higher returns with leverage in most cases.

This could result in the tenant/buyer suing the seller, especially if she can't or doesn't return the option money.My basic rule of thumb is that if a seller is in financial distress, do whatever you can to get the deed (low cash offer, Sub2, Sub2 with equity payment via a seller carry-back 2nd mortgage).

They're asking $66k and it's been on the market the better part of a year.Estimated Rent: $700Vacancy: $58 (1 Month/Yr)Taxes: $105Maintenance and Repairs: $105 (15% of rent)Management: $70 (10% of rent, though I'll actually manage it myself)Insurance: $50 (estimated)Tenant will pay utilities.If I assume a 5.25% interest rate, 20% down, and want a 10% Cash on Cash return, the most I could offer is $47k with the seller covering closing costs.

@Sonit Bhatt As you can see just from the responses you've gotten so far, there are plenty of markets around the country that produce solid returns.

Especially since you expect him to return your calls and texts so soon.How pressing are the questions you are asking when you call or text?

It worked for me as there was no negative cash flow in the deal and it worked for the seller as he unloaded a property he didn't want and his return increased and the income stream increased.

My best property for return and low headache factor is a newer larger property right on the edge of the low income area in a quiet pocket with great access, so it can attract better quality tenants.

Some properties being bid on by banks will return at a lower price.

From your numbers, this is a horrible return for a rental.