A NEWBIE WHO IS HAVING TROUBLE W 2% FORMULA ETC...

I am finding these calculations outrageous...although I am willing to learn if they are simply the truth and my inexperience has led me to believe otherwise. So here is my situation that applies to this:

1st, I would like to say I live in S.California where you cant get a 4 plex for less than a million dollars.

I have the possibility to buy a 4 plex in another state that has good job growth, very low unemployment, no rent control, growing population , low crime rate. A new Costco and shopping mall with major dept stores has just been built within a mile of the location. The 4 plex is in a development of 60 4 plexes that have a swimming pool and clubhouse. It is all brand new construction, so new roofs or major repairs should not be needed for the first 5 - 7 years (hopefully).

The 4 plex would cost me $335,000, it has taken a while to complete construction so the equity has gone up and it is appraised at 365,000.
The rents are $650 a month X 4.
The property management fees are 150 dollars a month ( on site )

I would put 20% down.

Can you apply your formulas to show me whether this is a good deal because the way it came out for me is that I would have to get 7,000 a month in rents to make this a "good deal" according to these formulas.... That seems crazy.

I am new to this but it seems that if I put a down payment on something and renters are basically then paying for at least half of it for me, then that is a good idea. I am perplexed as to why this is a bad investment. There must be something I am missing.

Please inform me!

I currently have no debt, about 300,000 savings, a decent but not excellent credit rating, and this would be the very first real estate investment I make.

Thank you. Lisa :goofy: :superman: :beer: :shock: :lol: