Updated over 9 years ago on . Most recent reply
50% Rule
Hey All-
Im just starting to run through and analyze deals on the MLS. Entering in all of the pro forma data for every multifamily property would take forever, so I am going to implement the 50% rule in order to weed out the good from the bad. Thoughts on this strategy? Does anyone use another strategy or rule to quickly run through deals?
Also, I am not sure if I am implementing the 50% rule correctly. Here is a link to one property I looked at: https://www.redfin.com/WA/Tacoma/3276-92nd-St-S-98499/home/2825569
So monthly income is $6,700. This leaves $3,350 / month after half of the income has been spend on expenses. Using the Mortgage Payment Calculator from BP, putting 20% down at a 4% interest rate gives a PITI payment of $3,917.74 / month. The question I have is, does the insurance and property tax get calculated in as part of the 50% expense? If so, I am including these numbers twice...
Best Regards,
Hans Wold