What are the your rules on investment property owning?

[Zach Kilgore]

especially for multi family units. Looking at buying a multi family unit and I'm obviously trying to make sure it's a good deal before purchasing. I'm going to throw out some numbers and I'd like some feedback. 

I'm going to use round numbers:

Purchase Price: 160K for six units. The units rent out from $400-500 each. Four units are currently occupied and two are being used as "showrooms"

Dwelling insurance is about $1400/yr
Property taxes @ $2700/yr
owner covers sewage/trash at @ $2000/yr.


These units are all relatively new and in good shape. Without knowing much more, what would you say? Suggestions or other things to look for? I'm obviously new to this so any and all information is appreciated.

[Christian Carson]

My rule of thumb for what's a good deal is this: take the monthly total rents and multiply by 60. If the purchase price is under this number, it's a decent deal (given that it is a good neighborhood).

This rule is a shorthand way of calculating the price at a 10% cap, assuming that expenses are 50% of rents.