All Forum Posts by: Britt Abbey

The realtor has not got back to me as of yet on the details in regards to roof, heater, etc. Can you help me out a little on the details of how the 50% rule works. From what i understand half of the cost of the potential rent would go towards expenses, which would be $775. What expenses should fit into that 775. I'll be manageing it and living in one unit. Would my cash flow be half of the 775? This is the part im a little confused about.
If this is not a good deal, what price would make it a good deal or how can i make it a good deal if possible

From my point of view... this is not a deal to make.

Assuming you're mortgaging 96.5% ($149,975) that will put you in the hole every month. At 4.25%, your principal and interest would be $736/month. Now add on 1.2% of the loan as mortgage insurance, and you'll add another $150 to the bank each month. Your mortgage payment without taxes and insurance would be nearly $890. Now factor in the 50% rule, your monthly expenses for everything else could be an additional $775, making your total cost per month $1665 while only bringing in $1,550.

For me, I'd want to see the purchase price around $100,000. Your monthly mortgage would be $475(Principal/Interest) + $120(PMI) = $595. That would leave you closer to $100/door as profit.

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