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Scott:

So your formula is quite different from MikeOh's. You seem to itemize, and take the current landlord's last 12 month expenses. Do you ever just use 50% of GR for your OE???? When ever I itemize I always come in under 50% of GRs. Shouldn't I be safe than sorry when calculating CF???

THANKS

Just wanted to thank Mike Oh & REI(John) for there responses. Can always count on you two class acts for help!!

I asked because this is my biggest hang-up right now preventing me from buying my first rental property. I know I shouldn't be buying thru a realtor, who has the properties listed, but they deals are supposed to be from motivated/distressed sellers. The realtor sends me his breakdown of the numbers. I see that he itemizes the expenses. And the properties always CF. Most over $100 per unit per month!! But when I apply the 50% rule, the picture changes to properties that breakeven or ones tha make very little money. So really having trouble finding ones that work with the 50% rule. I know, don't listen to realtors, I need to find a REAL wholesale deal for this to work, right!!

THANKS GUYS!!

Operating Expenses seem to be a big shade of gray for investors. Especially for a newbie like myself who has never run an investment property. Do the vets recommend itemizing expenses when running a cash flow statement since RE is local, or should I just use the 50% rule????? Do rentals really eat up HALF of my gross rents?????????

THANKS!!!!!!

Ryan, when you figured the cash flow on the fourplex, did you use 50% of GR as your operating expenses, or just itemize the expenses.

Thanks!

Thanks Scott, I feel like moving to Minneapolis!!

So a tenant can just hire a contractor when ever they want regardless what's in the lease, and then hand the landlord the bill?? Seems unfair, especially if the landlord could have made his/her own timely repair at cost.

Isn't this an issue that should be clearly spelled out in a lease?? Isn't there a section on maintanence responsibilities for all parties involved. And isn't there a clause or provision stating that the landlord must be notified of all maintanence requests before a contractor can be hired?? I agree this is about CONTROL. Before I would hand keys over to a new tenant, they would understand their responsibilites...

Does anyone feel that the recent wave of forclosures in this country will affect multi-family residential properties and small aprtment buildings. Seems as thought the vast majority of foreclosures relate to SFHs.

Thanks!

Ryan, can you show me a break-down in terms of numbers for that 40% ROI you speak of.

Thanks!

If a property doesn't cash flow without my 20% down payment, is it still worth keeping since I am in esence forcing it to work with my 20% down???

Thanks :D