Matthew Paul is definitely correct in explaining what pitfalls these houses can bring. at the same time, if these houses are purchased, rehabbed, and managed appropriately, and in the right locations, one can do very well.

BP,I came across the following news article at: http://thinkprogress.org/justice/2015/04/02/364225...In summary, a Wisconsin landlord is holding a young tenant liable for the cleanup of bio-HAZMAT from when the police shot and killed a friend of the tenant who was staying at the apartment.I'm curious for BP's thoughts on what is the correct way to handle this situation.

@Jonathan Alfonso you are correct.  

As long as you account for the cost it will take into correcting the mold problem, and let the seller know as to why you're coming in with what you offer due to the cost it will take to fix the mold, then it shouldn't be an issue.

You can also use 75% of new purchased property's lease amount to offset it's debt, provided you supply a signed lease agreement.You are correct that the full 200K is counted as gross income, in your example.Terry

Hello @Larry Fried; I responded to your reply but am uncertain if I did it correctly.  

Account Closed I believe Albert is correct in that you can't combine them.

So two or three inquires within a short time (a week to 10 days I think, if I remember correctly) frame works best.  

And compare SBL numbers on the contract with the tax record to make sure they match and you are looking at the correct lot assessment.

@Tobey Porter You are correct that the management fees differ considerably for long term rentals typically a 7%-10% management fee (per moth) + "leasing commission" of 1/2 months rent for a 6 month lease and up to a full months rent for a 1 year lease.For short term rentals the majority of the management fees here on Mau i ranges from 20% and up 35% - and some of the larger companies like the Aston or Outrigger will charge 50%.