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Cash on Cash)36%=(Profit)$870.44/(Down Payment)$2,400

It has always been my understanding that cash on cash return involved your cash flow divided by your initial cash outlay. How does you NOI equal your cash flow. What happened to your debt service??? Unless you factored that in already, because I don't see it. I would re-calculate your cash on cash return after factoring in the debt service. Unless you paid cash which is probably the case.

chance,...

Mark, how was the meeting???

Mike, what's the best place to look for desperate sellers??? Is there anyway to contact you about your book?? Email perhaps...

Thanks for your help!!

Wow, a thank you to everyone for the great advice. I have no problem admitting that I have NO experience investing in residential income properties. The only experience I have in real estate is my current home that I have lived in for close to 8 years now. And it has been a great experience. I have read close to 35 books on all aspects of investing in rental properties over the last 2 years. In that time while hopefully educating myself, I was able to build up a lot of cash. I have a goal of closing on a property by the end of the year. Again, all I see are over priced properties that I have to make work in order to cash flow. And yes, I have beem looking at mls. Primarily realtor.com. I guess I should stay away from that site. I was scratching at the surface. Guess I will have to dig a little deeper...

Thanks again for everyone's advice!!

Mike, maybe I should get your book.......

Since I am new to investing in residential income properties, could someone please explain to me at what point the seller will consider my offer an insult?? Is 30%below market toolow??? Should we not be concerned with what the seller thinks as long as we have the numbers to back up our offers????

I have been watching a nice quad for some time now. The price has come down some and is now listed for 199,000. The gross shceduled income monthly is 2,000. This property willl cash flow, but only after a substantial down payment. With no maney down it bleeds red. Should I ask $175,000?? I seems like a nice investment. Appears to be in good shape. Good rental history. Fully occupied. Might be one worth looking into a little further at the right price...

TC, don't get me wrong. I agree with you. Why should I have to MAKE the property work with a big down payment. But like I said, that is the only way to make these properties work in the southeastern Pa rental housing market. Unless I find that needle in the haystack. Should I just make some really low offers and see what happens and not worry what the seller thinks????????????

Thanks TC, I am new to this and want to learn from people with experience.

If I have to run the numbers against the purchase price, they will NEVER cash flow. I have a hard enough time finding ones that cash flow with 20% down. Pa must be one tough market. I guess the only thing I can do is insult the sellers by offering 30% below market for the properties.

You may want to try a piggy-back loan. In essence you finance the down payment as well. Although the interest on the second loan is usually higher. Just an idea. I know someone who did that with a home loan and it worked out quite well for them.

TC,

I am getting the 20-30% down from almost every real estate book I have read on investing in residential income properties. The books state that because banks/lenders see it as more of a risk they require more down payment. But you are coming from personal experience and I tend to believe that more. Only problem is that none of the properties I looked at will cash flow with 15% down. And if they do, it's not much. Anyway, thanks for your input!!

Chance2...