You need to factor that into the equation.

One thing I need to do is figure out how the closing costs fit into that equation.

To me, this equates to very low risk for RE investments, as I could always cover mortgage payments of vacancies as necessary.My long term goal is to accrue properties that produce enough passive and active income that I can do RE full time and/or only do technology work only because I want to.

Then plug it into the equation to determine your cashflow:C = GR - E - DSor, reformulated:C = GR - .5GR - DSC = .5GR - DSOriginally posted by "flipster":be my first deal.

If you are accurate with the estimates for the work and the ARV then the equation will tell you the maximum you can pay.Start lower and see if they take it.

My point is that you don't know ANY of the three variables with which to complete the equation.

Next question, can you provide a tool that will calculate the ballon payment or the equation that you use?

Unfortunately, buying right is only one part of the equation.

We've been trained to equate high risk with high return, which I think has been transmuted into high risk investments guarantee high return.

For example if you are obtaining a mortgage on a known rental unit with a proven track record, could a lender factor that into the equation, thereby requiring less down?