Operating expenses include everything you spend to operate the business, but do not include the mortgage (principal and interest).The 50% rule simply reflects the fact that throughout the United States, operating expenses run 45% to 50% of the gross rents.

I would like to connect with any serious HML's interested in this geography.Appreciate hearing only from principals---no brokers fronting for HMLs.

`(B) CURRENT BORROWER DEBT-TO-INCOME RATIO- As of March 1, 2008, the mortgagor shall have had a ratio of mortgage debt to income, taking into consideration all existing mortgages of that mortgagor at such time, greater than 31 percent (or such higher amount as the Board determines appropriate).`(2) DETERMINATION OF PRINCIPAL OBLIGATION AMOUNT- The principal obligation amount of the refinanced eligible mortgage to be insured shall--`(A) be determined by the reasonable ability of the mortgagor to make his or her mortgage payments, as such ability is determined by the Secretary pursuant to section 203(b)(4) or by any other underwriting standards established by the Board; and`(B) not exceed 90 percent of the appraised value of the property to which such mortgage relates.`(3) REQUIRED WAIVER OF PREPAYMENT PENALTIES AND FEES- All penalties for prepayment or refinancing of the eligible mortgage, and all fees and penalties related to default or delinquency on the eligible mortgage, shall be waived or forgiven.`(4) EXTINGUISHMENT OF SUBORDINATE LIENS- `(A) REQUIRED AGREEMENT- All holders of outstanding mortgage liens on the property to which the eligible mortgage relates shall agree to accept the proceeds of the insured loan as payment in full of all indebtedness under the eligible mortgage, and all encumbrances related to such eligible mortgage shall be removed.

Anyway, the correct way if your valuing by the income approach is to take the total yearly gross income, subtract all of the expenses except debt service (principal and interest payments).

Carona, a long-time, deeply-entrenched Republican incumbent, is CEO of Associa Principal Management Group, "one of the largest property management companies in the nation," according to KHOU.

Tenants paying off principal of loan which creates equity and makes me "richer"3.

Cash flow estimates are based on a 20% down (12k principal and 48k load) 30 year loan at 7.5%.

In this case, they may be able to handle the negative cash flow out their paycheck and will still end up ok with the appreciation, tax benefits, and principal paydown by the tenants.I'm not talking about any of those scenarios.

Your only chance would be if the LLC were already set-up at the time of purchase and you were a principal.

Rick also is a principal with www.assetsclearinghouse.com a facilitator for financial institutions seeking to liquidate their distressed assets and non-performing loans.