Question on 50% rule and Cashflow analysis

[Joe Ward]

I'm just starting out with market analysis and property analysis for small multi as a first cashflow investment vehicle. My question is how to apply the 50% rule and cashflow rule properly for analysis.

For example, applying the 50% rule on a property that I'm looking at, the cashflow comes in at around $150/unit , a base hit - short of the $200/unit home run.

However the CoC is a whopping 20% and the gross rents are around $300 / unit ... which according to the multi webinar I just watched are both in grand slam territory. Am I misunderstanding the 50% rule and the application of the $200/unit cashflow rules of thumb?

[Tim Herman]

@Joe Ward it would be easier if you had posted the results. You might be leaving out of expenses that a seasoned investor uses. I know they use 5% for vacancy,repairs and capex which are low. Did you include PM. Any utility expenses that the landlord pays, Gross rents*50% = Net income. You then take your principal and interest from the NOI and that gives you the clear cash flow divided by the number of doors.