., don’t forget the CPA and Lawyer costs) Again Net Operating Income is calculated before debt - what matters more is the NET Annual Income (or annual cash flow): NET Annual Income = Net_Operating_Income - Mortgage_PaymentsAnd that leads to the Cash on Cash Return on Investment: C/C ROI = Annual Cash Flow / (Down Payment + Closing Costs)And I’m willing to bet you don’t get C/C ROI above 10% on any SFR in Austin area (based on these calculations and bought with conventional means, not subject-to or assumptions, or owner financing or other creative financing).

And this assumption was based on many hours of research I have done from listening to podcasts to reading blogs to having discussions with people at my local investor meetup.

I'm working under the assumption at this point that if this seems too good to be true, it probably is.

The home ARV is probably close to $250 and the tax assumption is there as well or higher (this was never appealed) I assume the home was worth something in the ballpark of $180 needing a kitchen/bathroom and lots of updating of plumbing and possibly some electrical too.

I made an assumption for the ARV value

(though note it can be manipulated because it's based on a bunch of assumptions that you only can truly know through a lot of work or experience in that market)Developers in my area like 2 cap areas near the beach.

Thus, my assumption is that $850 a month might be pushing it and it is possible I may see the rental price roll back to $750 especially if there is a downturn in the housing economy. 

To name a few:Base your underwriting on how you will operate the asset, not based on how it is currently operated or based on the broker's pro formaCreate a budget for each year you plan on owning the property + sales assumptionsHave an upfront operating account fund in addition to ongoing reservesBased the market rents on your own rent comp analysis, not the broker's rent comps15% contingency on top of interior and exterior rehab budgetConservative annual income growth assumption (no higher than 3%)

Well, as we get closer to the $300/mo cash flow and below - I have a really hard time trusting that my assumptions aren't going to 'eat me up'. 

Is there some kind of BP standard assumption on how much money we are putting down when labeling a property as cash flowing vs. not cash flowing?