The rate is usually about half a percent higher for investment property.Kristine - Investment property is an investment property.

I bought 5 properties last year with a CAP rate of around 4-9 percent.

Blend that percentage and long term that should get you 7-8 percent.

I am financing conventional 20 percent down.

Even at 50% of rents (which put's it close to $15k expenses) you are still at a cap rate of 14.75 percent which is very good.

A lifetime of bad choices will make you arrive in one place, and a lifetime of good choices will help you arrive in another place....agreed?

PROPERTY 1SFR, in a great school neighborhood-purchase price: 84K-cash to close: 22.6K (seller will pay 2% towards closing costs)-monthly rent: 1000Expenses:-mortgage: 305-tax: 216-insurance: 70-prop mng (10%): 100-vacancy (10%): 100-repairs (5%): 50monthly CASH FLOW: 160Cap rate: 1920/84000=2% (two percent!!!!!

Paul Nagy - Here's what I'm getting at 111K, using the 50% rule.Gross rents: 1250Expenses: 625 (vacancy, mgmt, tax, insurance, capex, maintenance, etc)NOI: 625Debt service (P&I part): 411Cash flow: 214Figure 25.2K invested (22.2 down plus 3 in closing costs), so your cash on cash return would be about 10.2%.It works, though an extra couple of percent would be nice.I do have a question for you, though, about the 20% down.

If yes, what percent of the current rental income can they use -- 75%??

There is ZERO percent chance that an FHA underwriter would approve a loan on this property.