What Formula Makes a deal good?

[Mark Norris]

I'm Pretty new to being an investor and have been studying the numbers game. So this may sounds stupid however I don't get it should be simple right? Whats the simplest  formal or example of a break down oh how the numbers look on a rental for either a signal family or duplex for a Purchase to rent and hold, Like a quick glance to see if the house is worth perusing?

[Curt Davis]

@Mark Norris

This is just some basic rule of thumb but you should at least be able to get a 1% rent to price ratio meaning buy for $100k and rent of $1,000 minimum. 

Other people will also take into account vacancy and repair allowances, say 8% each per month. Then there are investors who want to also figure in CAPEX at say 10%.

You personally need to determine what amount of monthly cash flow you are looking for either as Gross cash flow or NET cash flow.  I can tell you that when you start to take vacancy, repairs, capex, etc... into the equation it makes the figures look worse.  

Some ROI or cash flow goals can only be met if you do this on your own. If you consider buying from a TK provider you can forget about it if you factor all those expenses in.

Good luck