Rental Calculator numbers don't make sense

[Boaz Golani]

Hi everyone,

I am brand new to Bigger Pockets.  I have started using the rental property calculator to assess the profitability of  a typical 2 family in my neighborhood.  Prices here in Riverdale, Bronx, NY are high.  But rental prices are high too so I though there should be some correlation.

The average 2 family houses are advertised for $800,000. An apartment may rent for about $2,500 ($5,000 for the 2 apartments). Using the calculator I needed to go down to a purchase price of $200,000, assuming $50,000 for repair and ARV of $300,000 before the number started making sense (COC of 10.44%, positive cash flow of a couple hundred dollars, and a Cap rate of 7.10%. The point is that I kept the rental price at its true estimated rate ($2,500). Obviously you cannot get this kind of rental in a neighborhood where houses cost as low as the numbers I entered above. Am I doing something wrong? Thank you so much for caring to clarify.

[Doug McLeod]

The calculator makes sense - the "investments" don't.