A few questions regarding the 50% rule

[Brian W.]

Is simply applying the 50% rule running the numbers? In other words, can I simply calculate what my P&I will be and as long as it's 50% or less of the expected rent, then the deal has potential? Can this replace other, more in depth methods of running the numbers such as calculating the cap rate and CCR?

Also, how does a down payment play into the rule? It seems that in a small down payment scenario, the numbers might not work, but they would work in a higher down payment scenario since the monthly debt service would be lower. Why would the latter higher down payment scenario get the green light, but the former lower down payment scenario get the red light since the down payment is still an expense that comes out of the investor's pocket? It seems like it should play into there somehow, but I'm not sure how since I haven't read anything that mentions where the down payment comes into play with the 50% rule.