Good deal or not? Infinite Return but violates the rules of thumb

[Luke Roberts]

Hey Investors, 

    I have been looking for deals all year and in my area, rents don't typically EVER cover the 1% rule because houses are too expensive compared to rents.  However, this deal is owner financed up to 80% (I figured I would use only 20% owner financing and 80% bank financing to get the best blended interest rate) and I can purchase the property with zero of my own cash.  So, my question is, is this a good deal even if it barely cash flows due to the fact that it is infinite return and I will still have the upside of equity, appreciation, and tax advantage.  It violates the 1% rule and the 50% rule and it barely cash flows.  

Is this a good deal or not?

Would you take the deal or not?  

Thanks!

Luke

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

[Joe Villeneuve]

It's only infinite CF if and when it CF's.  If your cash flow is tight, it means two things:

1 - At some point, it won't CF, and when it does(n't)...

2 - there wouldn't be enough accumulated CF to cover the negative CF.