42% return on my investment- Low Income Housing

4 Replies

Hello,

Just wanted to let everyone know that I just closed on my 4th house. We purchased this house with $7,000 cash. I am estimating $3,000 in updates/repairs. Market rent is $772/month but I plan to rent it for $700/month.

Using the 50% rule for expenses, which is more like 30% for me, is giving me a return of 42%.

$700/month x 12 months= $8,400

Divided by 50% for expenses= $4,200

Purchase price of $7,000 with $3,000 in repairs gives me an all in budget of $10,000.

$4,200/$10,000 is 42%.

I invest strictly for cash flow.

Originally posted by @Roger S. :

Crud, I didn't notice you already accounted for expenses.  That's even better.  Way to go.

 Yeah, I always try to account for 50% even though I keep it well below that. I pay cash for my properties so mortgage payment isn't a problem for me, and I manage my properties myself.

I don't plan to always manage them though, so I account for it in my analysis each time.

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