However, they approach financial health from different angles.The 50% Rule is a quick estimate that suggests operating expenses (excluding mortgage principal and interest) will roughly equal 50% of the property's gross income.The DSCR is a more precise calculation (Net Operating Income / Total Debt Service) that determines if a property generates enough income to cover its debt obligations.Deal example:- Class C middle class neighborhood- 4bd / 2ba single family house- ARV: 190k- Purchase: 105k- Rehab: 35k- Market rent: $1,400-1,525- Section 8: $1,475- Property manager: 10%- Taxes: 125 month- Insurance $1250 yr- HOA: $55 month- purchased and rehabbed with all cash.

At $2450, it will cover those expenses.

You will also discover the warranties don't cover as much as you think, and claims are often denied.Home warranties are so bad that most professional property managers will not manage a property with one in place.

My business partner and I financed the deal for 1272 Lakins Rd entirely with cash, covering both the purchase and all renovation costs.

A platform that updates their data daily or weekly is covering a staggering cost in order to provide that to the end user.

Home warranties can sometimes cover rental properties, but it really depends on the specific terms of the warranty and the provider.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

My plan is to funnel the rental incomes from all three properties, along with my W2 income, back into the HELOC while covering all expenses from it as well.

Part or all of the rent is covered by the US gov't (take that as you will).

Assuming the ARV you mentioned is accurate, at 75% LTV you'd be able to pull enough equity to cover your existing payoff, refi costs and walk away with a good chunk of cash in your pocket.