42% return on my investment- Low Income Housing

[Derrick E.]

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.

[Roger S.]

Some of my properties have similar numbers, but remember, you will have repairs and maintenance and vacancies.   But you're in a good starting place.