Am I running numbers correctly?

[Chris Trupiano]

New investor here. I'm trying to do quick analysis for properties using mostly rules of thumb (50% rule, 1.5% purchase price for rent, ect.) I feel like I'm horriblely estimating them. I'm not sure if I'm using the rules of thumb wrong or not. Any tips when trying to do a quick analysis to determine if a property is worth checking out? I'm trying to do multi family but another thing I'm unsure of is a lot of properties seem as if they're normal SFH but are listed as multi family? I'm thinking of du-, tri-, and quadplexes. This is the listing I'm doing a rough analysis on: http://m.homes.com/property/12613-w-85th-pl-lenexa...

Thanks for any help BP!

[JD Martin]

Thoughts in no particular order:

• Scrap the list price on your sheet, it means nothing.
• Is 1.5% of purchase price a reasonable figure in your area? I roughly use a 1% of my all-in as my bottom figure, i.e. if I buy a house for 40 and put 20 in it I have to be able to rent it for a minimum of 600. 
• Will your expenses be 50% of rent? How do you know this? I hope it's not because you saw a number on BP. You should have a good handle on your insurance, taxes, reasonable vacancy expectations, and routine maintenance for the house/area you are looking at. For example, a brand new house in a hot neighborhood is probably going to have minimal maintenance, capital and vacancy expenses, whereas an 80 year old home in a sketchy area will (likely, depending on what's been done) have higher levels of maintenance & capital expenses and almost certainly greater levels of vacancy. 

Buying a house just on what you have on that piece of paper is going to be dangerous. You've written "Seems very high" for the rent number. Is it? There shouldn't be any "seems" in your answer - either you know that figure is outrageous for what you're looking at, or you don't know one way or the other, in which case you should probably go find out first.