ROI calculation with HML and Refi strategy

[Ariel G.]

Hi. I've been trying to run the strategy for investing without the
oportunity of a conventional loan.

I've been trying to run the numbers, because it didnt seem to work out
for me because of the higher interest rate of a HML compared to a
conventional mortgage, that sometimes is the only option for a
foreigner like me for example.

Please Id apreciate coments on the calculations to double check if
they are run down well. I'd love to read from foreigners or others
that succeeded doing it without a mortgage in the past, from HML,
refinancers, and of you people with experience.

Plan: For a $100.000 property, 80% LTV loan by a HML at a 10%
"interest only" anual rate, then refinanced by a new loan at a 6%
anual rate as soon as tenant stabilized.

Asuming a 1% rule rent of property value, that would be 1000 a month,
so 12000 a year Gross income right?.

By deducing the loans interest: 10% x 80.000 = 8.000 total yearly interest cost.

Considering:

5% vacancy rate = 720
5% for maintenance costs = 720
7% for propery management= 1000

So NOI= Gross income - interest - other costs= 12000 - 8000 -
720 - 720 - 1000 = 1560 a year correct?

ROI (HML 10%): NOI/20% invested = 1560/20000 = 7,8%
ROI (Refinanced 6%): 12000 - 4800 - 720 - 720 -1000 = 23,8%

This of course pretax.

What are your toughts? Is this correct? Are these numbers reasonable
and reachable? Anything missing? Thanks.