To Buy, Sell or Rent

Before you think about buying a house, ask yourself "What am I going to do with it?" This simple question will dictate your exit strategy. I seek to purchase houses for 70% of the After Repair Value minus repairs. For example, if the house should sell for $100,000 in a good market, I would look to pay $70,000 minus expected repairs. I would expect repairs to be $10,000 on this example so I would like to buy the house for $60,000. To buy the house for $60,000, I would offer $55,000 and close in 14 days cash deal. I would expect the seller to negotiate another $5000 from me thinking he got a good deal by squeezing me for $5000. If my intention were to rent the house out and I wanted cashflow immediately, I would probably be willing to analyze it differently. Let's say the property would rent for $850/month. I know that taxes are going to be $150 per month. The mortgage on a $65,000 house with 10% down would leave me with a note on $58,500. Based on a reasonable interest rate, my note would be $500 per month plus taxes ($150) and insurance ($100). So my cost per month would be $750 and my income would be $850. That's a lot of work for little money. I would not want to get into this propery at $65,000.