Once you establish you operating expenses you can set up an account for reserves (capital expenditures) of say 6 to 7 % as per the NAA study.

I'll try to interpret your numbers to make it easier to evaluate.Total for 2 duplexsPurchase price 800,000Down Payment 200,000Amount to finance 600,000Gross Annual Rent 48,000 to 72,000 (1,000 to 1500/mo/unit)Your vacancy, property taxes, insurance, property management, capital expenditures, repairs, maintenance and other rental costs will like eat about half of this rent on average.Your intention is to finance with an interest only LOC.

Even so, an 18-cap deal is a good deal, and I would pursue more detailed expenditures and rent (parking?)

It becomes cheaper because you feel no need to fill any void with disposable items so after your initial expenditure, you're done for good as far as that specific expense.

So, a rental that generates $1000 in monthly income might expect to have about $500 in monthly expenses, including taxes, insurance, vacancy, maintenance, capital expenditures, property management, overhead costs, legal expenses, etc.

It takes about 3 months before you see a return, but even if you're only referring them to an investor, you can see a good profit, without any expenditure.

Look at all the expenditures going out and eliminate those that are just plain luxury items!

If you purchased right and accounted for things like capital expenditures, vacancy and repair in addition to cash flow, you should be able to stash cash fast.

Taxes aren't a DIY game when you have questions like this.Any dollar of expenditure either goes into your basis or is deductible or is capitalized.

Weather expenditures.