NEWBIE | 50% Rule Angst

[Bob Razler]

Hello:

First off, thank you to everyone who pitches in here.  It's a great community and a great resource.  I hope one day I can contribute at the level that I partake.

I am just starting off and I have been analyzing multifamily deals (using the tools here).  One issue I am finding is that I have what I feel are great estimates of the expenses, income and a good cash flow for these homes, but they all come out with a negative cash flow when going by the 50% rule.  Back calculating to a new purchase price based on that rule leads to such a low offer that I feel like I might ruin a good relationship with an agent or seller even making the offer.

As you can imagine this leads to much angst on my part.  I think I found a great home, my numbers look good, 50% looks bad, I face self-doubt and decision lock.

I am not missing any expense CATAGORIES, so if I am understating them it would be in MAGNITUDE.

I am willing to assume that sellers have the properties listed at higher numbers just in case someone offers, but my revised offered would be 65-75% below the list price.

I would love to hear anyone's advice or comments.

Thank you!

Bob