What do you think about this deal? [Calc Review]

[Casey Rondinella]

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Phoenix Arizona near downtown

* is there an issue with ARV? I put it as "$400,000" in form but says more than $400,000 on report

* what about 50% rule? seems to break the deal.

* Seems like cash on cash return is too high

*  Is that an acceptable debt coverage ratio? 

AZ

*This link comes directly from our calculators, based on information input by the member who posted.

[Brent Coombs]

@Casey Rondinella, yeah, just hoping that its expenses (separate to Principal and Interest) will be a lot less than 50% of its income, won't make it so. A couple of things I noticed: 5% seems too low for vacancy allowance, and, I don't know any PM that will let you off with just 5% of rent either. I reckon both of those guesses should be doubled.

Mind you, once you're convinced your individual expenses are quite accurate, you don't have to relate that to the "50% Rule" at all, because you'll have worked out an actual percentage!

My "rule of thumb" is that if you can't get (at least) 1% gross rent per month out of its value (in this case, that would be $4,000/m), you'll arrive at the very same question you're asking!

Lastly, have you paid enough attention to the Refinance terms? eg. Will you really be able to get a fixed 30 year mortgage, for a pure investment? Just sayin'. Good luck...