When I build ground up with budgets north of $3M and have $500,000.00 of site work that will takes months to complete, are you saying I should be paying $1M to the GC upfront on day one?

The inputs for the image in this screenshot are as follows:500k purchase price duplex.Rent each side for 2k/month (this is after you move out)5% down paymentClosing costs: 7k6.4% interest rateInsurance: $250/monthUtilities (paid by owner): $400/monthVacancy budgeting: 5% of monthly rentMaintenance budgeting: 8% of monthly rentCapEx budgeting: 7% of monthly rentEven though you are negative $312/month after budgeting for future expenses, your net worth ROI is massively positive.

This property in particular had some additional unforeseen costs (main water line damage, sewer line damage, etc.) that certainly caused us to go way over budget.

For example, should I have one checking account that manages all expenses, such as down payments for properties and serving as the main source for rehab budgets?

You’re offering people a place to live that’s both budget-friendly and comfortable, which translates to lower vacancy rates.Another key advantage is lower overhead.

Be financially prepared by having an emergency fund and budgeting for repairs.Good luck!

Compare the budgets, where is the fat? 

Of course, responsible landlords budget for regular maintenance and repairs.

San Jose and the Southern Bay Area were appealing but may be outside our current budget.

Know your budget.