Essentially, the portion of the property’s income considered UDFI is based on the percentage of rental income derived from debt.For example, Property A is purchased for $100,000.

The cap rate should be 100% market derived, which comes from recent comparable sales.

Obviously, as you correctly noted, any amount you use to make extra mortgage payments you are essentially investing at the rate of interest of the mortgage you are prepaying.The hook used by the people selling this useless program is that the number looks big because it is a number derived from the assumption that you would have paid over 30 years

But what these guys are messing around with makes me super nervous that they may become the next financial weapons of mass destruction because, after all, they are once again, derivatives. 

In terms of the commercial spots, you may want to go down the "gentry" checklist to see what's not in the area:Coffee ShopCraft Beer Place"Artisanal" Bistro - Think grassfed meat sandwiches and avocado toastFood Truck ParkCrossfit (or derivation thereof) GymBakery or CupcakeryBicycle Repair ShopHipster Hair SalonBoutique Clothing/Craft/Candle ShopShared office space with strong Wi-Fi, a keurig machine and some free weights (ala Mr.

Some, I think are derived from them wanting by to fill their pockets for the budgets, but most got burned by the downturn and want to make sure the properties are being maintained.

In reality it may be more than 50% depending on the property age, occupancy, and other factors ("all bills paid" have higher expense ratio than 50%).CAP rate is derived from comparable sales.

Person B may pledge a person guarantee if they like.2 - Because person A's IRA is receiving income that is derived from the use of debt financing, the IRA will have exposure to UDFI taxation.  

The income approach is next, more weight for a landlord or non-owner occupied dwelling, the least weighted is the replacement approach but can be used to bring adjustments into focus with the market when fewer comps may be available.Replacement or the cost approach is most relevant with new construction or a major rehab, but with a SFD, you always need to look at the market as that is the key to your financing, a buyer's financing, the time on the market, your exit strategies and profits derived from that local market.On that property, it didn't pencil out to the market at the profit required for the brain damage involved, so it may end up being a more creative deal......we will see

Referring to options here as in the derivative investment asset - what does everyone think?