Analyzing a property using 2% 50% Rule using an FHA Loan
How do you analyze a rental property if you know you are going to use an FHA loan for your first deal, while using the 2% and 50% rule? I know how to do the rules but how do you incorporate the right numbers If you know you are going to use an FHA loan on your first deal.
Example: 123 Carter street is a triplex on Zillow.com. Property costs $100,000. All the rentals are $650 a month. Mortgage for a 20% down 30 year fixed loan is $325.
50% rule: $650*3= $1950 Total Income
$1950* .5= $975
$975-325= $650 Cashflow
2% Rule: $650*3= $1950 Total Income
$1950/$100,000= .0195= 1.95%
Question: How do I use these rules if I know I will be using an FHA loan for my first deal? or How do I set up the numbers if I will be using an FHA loan for my first deal?
(I know these are just rules that should not play into the final factor on buying the property, I am just trying to get through the first part in analyzing a deal seeing if I should do more analyzing on it or not using these two rules.)