I use a version of the 50% rule as a quick but reliable measure of expenses on a single-family: you can reasonably expect all monthly expenses not related to the  principal+interest of the loan on a property OVER THE LONG HAUL to be 50% of monthly gross income.I also think she's just calculating that PITI expenses are pushing her down to - $120 a month.

Run your COC with Principal and Interest, since you're looking at this from a long-term standpoint.c. 

Smith, RA - Principal Architect at Architect Owl PLLC (Licensed in NY & CT)

With the new Business Owner/Investor continues to pay the Mortgage with a service company so payments Principal and Interest go to the Bank as scheduled per the original MortageHow can the new buyer do a wrap (#subject to) with the #first #lien for the underlying mortgage where as the Seller equity is in the second position?

If the cashflow is low, you likely will be barely covering the interest on that HELOC, much less the principal.

Yes, you'll be paying mostly interest rather than principal paydown starting out with the FHA loan hence the better play for you on paper but maybe not on the monthly.It's not too risky so long as you pick your market(s) and do your numbers right.

In the end, you'll have some amount of money - your principal payments plus the interest they earned over the course of a year - a total of $306.97. 

That's not to say that a property can't still be a good investment however, through appreciation and principal paydown.

That’s an extra $1500 that could be going towards principal.

So after COVID when government was giving away 6 months of Principal and Interest as rebate, I started looking for a property but couldn't find fast enough.