Using the formula "rent - PITI = cashflow", it seems like a decent deal but using the 50% rule the deal goes south pretty fast.

However, you have now planted a seed in their mind that the property may not be the price they are asking.

Check with the local concrete plant.

The book "timing the real estate market" (Campbell) looks at a more formula based approach to evaluating when a market is ripe to invest and discusses these factors in more depth.

The road ahead may look long and daunting, but use that time to learn here on BP.

I'll go ahead and modify or cross post this over in the flippers forum.

Even if you just got back all the funds you put into the property you are still coming out ahead.

Anyone who turn a consistent profit on their first few flips is WAY ahead of the game -- not only are they building a successful foundation for long-term investing, but they're making money doing it.While I would disagree with his decision to do any of the work on the project himself to save money, and while I'm not a fan of flat-fee listings, it sounds like Danny had a good grasp of the numbers on this one, and if it sells where he thinks it will, he'll have a very decent payday.That's more than I can say about my first flip, which earned about $3000 over 3 years of holding (it was an unintended rental for quite a while)...

If he absolutely insists on applying anyway and wasting his $30 application fee, I would go ahead and run the application and use the information you already have about him to reject him.

You gotta be tenacious to get ahead in this life, but its worth it!