Condo and 50% rule - Sanity Check Please

[Bill Schrimpf]

I need a sanity check please! I see too many condo deals like this in my area (Reno, NV) and keep passing because it looks like these wont cash flow. Am I doing this right, can somebody check my math and logic please? It just seems like the 50% rule should be less for condos, although when I asked before, I was told to use 60% for condos! Is that right? These numbers are estimates, for screening.

My goal is buy and hold to generate passive cash flow from rent.

The following looks painful, is that right?

Purchase Price = 64,500

Finance 80% = 51,600

mortgage payment = 324 (includes taxes, not insurance)

HOA = 155

Average Rent = 690

50% rule = 345

My cash flow estimate calculation:

Rent - mortgage - HOA - 50% rule = est. cashflow

690 - 324 - 155 - 345 = Pain

Thanks in advance!

[Steve Babiak]

The HOA being over 20% of rent is the real issue here.