Is it ok to buy a house if the cash on cash is great, but...

[Edward Heavrin]

What are your thoughts on buying a property that has amazing cash on cash return (30-40%), but doesn't meet the 1-2% rule or any other rule for that matter. Basically, I can buy a Triplex with an FHA Loan at 3.5% down. Property is in pristine condition, so no rehab necessary. Because I'm only putting down around 10k, it makes the cash on cash return very appealing.

Is it ok to pay a bit more if the I'm getting it for practically nothing? It still cash flows about $400/month (after accounting for vacancy, cap ex, and other expenses) but the overall loan is a bit more than I'd typically go for. Thoughts? 

[Brent Coombs]

@Edward Heavrin, care to share those "vacancy, cap ex, and other expenses", here?

If you get any of those expenses wrong, your risk can increase exponentially!

Why "exponentially"? Because of the 96.5% debt that you'd be servicing, regardless!

It might help us to help you, if you share both the outgoings and the (2/3) incomings.