This is relying on a 35% expense ratio, which I believe many would argue is conservative and should be higher.Round Number Case Study:$12,000 Monthly Collected rent$4,200 Monthly Expenses (35% Assumption)$7,800 NOI$7,800/$500,000 = 15.6% cap rate

.• $60k purchase• $35k rehab• $95k total rehab loan payoff• 15% deposit = $14,250 "down payment"• $126k ARV (confirmed via refinance appraisal, borrower expected this to be higher)• 80% rate/term refinance ($100,800 loan) @ 6.75% [700-719 FICO]• Applied $4k of deposit to payoff for an updated payoff amount of $91k• Cover closing costs with 80% r/t refi + $2k back to borrower at closing (still considered a r/t refi if under $2k) + remaining $10,250 deposit reimbursed after payoff = $12,250 total back to borrower• $4k of his deposit + closing costs for rehab loan = his "cash" in the deal• $1,250 market rents• Total PITI = $765.62• DSCR = 1.6327 I do not see the hold costs.  

Beyond interest rates, points, and fees can really add up.
Before committing to a loan, always calculate your true cost of funds — it can change your deal’s entire ROI.
What’s your go-to checklist before finalizing ...

I took your advice and lined up quotes from three directions — DSCR, HELOC, and a small-bank portfolio loan — just to compare the true cost.DSCR looks best for me right now since it doesn’t rely on personal DTI, but I’ll probably keep the LTV around 65% to maintain a 1.1+ DSCR and a $15K cash reserve buffer.The risk-management angle you mentioned hit home — I’m building this to scale safely, not chase max leverage.

Do not rely on it for legal advice.

Total rent $384550% rule$3845 * 0.5 - $3600 = $-1,677/monthThat is a lot of negative cash flow.  

This means less competition for those who are serious, hardworking, and committed to building a long-term career.You'll Learn Real Skills: When you can't rely on easy refinances, you're forced to become an expert in purchase loans.

Feeling your way through is totally normal; every first investment has a learning curve.You probably already know this, but one thing many first-time duplex owners miss is how home office rules can apply if you manage the property yourself.

Totally!

Do not rely on it for legal advice.