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Annual income. Gotchya. Thanks!

I will call my appraiser ans ask about the 'income appraisal'. Again, thank you!

How does the 100% cashout work? Thanks.

Good info Ryan. I will call an appraiser friend to find out more as to how the appraisal values are determined.

So, how exactly is GRM (Gross Rent Multiplier) determined? This is probably a topic for another forum... I'm new to REI so this is something I have not yet come across.

I see on one website that it is determined as:

GRM (38) = Sales Price (40,000) / GRI or Gross Rental Income ($1,050)

My figure 38 is different than 4.2. Sorry to be dim, but could you explain this for me and others that may be following this thread? 8)

Thanks Ryan. I would expect the property to appraise for much less than the after repair value (ARV). Any other suggestions?

My wife and I want to buy our 1st rental property. We are currently looking into a duplex that we could buy for $40,000. We can get a 6.5% for 15 years ($314/mo for P+I) or a 7% for 30 years ($240/mo).

My wife and I have good salary history and good credit (780 and 810). After 10% down + closing costs we would need to put $6,000 down (10% of purchase price + $2,000 closing costs). We can and are willing to pay the $6,000.

The duplex will rent $525 per unit ($1,050/mo) after repairs are made. Repairs are estimated to be $12,000. We do not want to use any of our other current assets (401K, IRAs, etc.). Our plan is to rent the property for many years to come.

We have $65,000 equity in our primary residence (which has a 30 yr fixed for 5.875%... if it matters).

What would be the best way to come up with the $12,000 for repairs? HELOC? 2nd Mortgage? Other?