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Updated about 7 years ago on . Most recent reply

What do you think about this deal? [Calc Review]
Phoenix Arizona near downtown
* is there an issue with ARV? I put it as "$400,000" in form but says more than $400,000 on report
* what about 50% rule? seems to break the deal.
* Seems like cash on cash return is too high
* Is that an acceptable debt coverage ratio?
AZ
*This link comes directly from our calculators, based on information input by the member who posted.
Most Popular Reply

@Casey Rondinella, yeah, just hoping that its expenses (separate to Principal and Interest) will be a lot less than 50% of its income, won't make it so. A couple of things I noticed: 5% seems too low for vacancy allowance, and, I don't know any PM that will let you off with just 5% of rent either. I reckon both of those guesses should be doubled.
Mind you, once you're convinced your individual expenses are quite accurate, you don't have to relate that to the "50% Rule" at all, because you'll have worked out an actual percentage!
My "rule of thumb" is that if you can't get (at least) 1% gross rent per month out of its value (in this case, that would be $4,000/m), you'll arrive at the very same question you're asking!
Lastly, have you paid enough attention to the Refinance terms? eg. Will you really be able to get a fixed 30 year mortgage, for a pure investment? Just sayin'. Good luck...