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Updated about 8 years ago,
A newbie question about multifamily
Going to throw out an example purchase for my questions, bear with me :) Ok, so I want to buy a duplex and rent it out. I'm going to just throw a number out, lets say total price is 180k. So question number one. I would divide 180k by 2 then multiply the 90k by lets just say 1% to get the amount of rent i should charge each tenant right? so annual income would be $21,600, for my example I will say my annual costs are $12,000 which leaves me with $9600. So here is what I don't get, if all I put into the property so far is about 50k (36k for 20% down payment and 14k for whatever else) do I just do 9600/50k? or 9600/180k? i get 19.2% c.o.c with one and 5.33% with full price. Which formula should I follow when buying a buy and hold multifamily property?