PS: I'm not saying you should buy this house, only giving a quick illustration.

The appraisal states that fair market value is only $1150, which is actually less then they rent for now.My real estate agent has already provided the bank with several pieces of evidence illustrating that this appraisal is wrong.

I know they are different type of tenants but I mention it to illustrate the amount of traffic we have on this street.2.

Matthew Gardner over at Gardner Economics (http://gardnereconomics.com/) has a chart that illustrates the cyclicality of real estate markets.

Here are two examples that illustrate my question.

Rent increased to $2,325 for year 2.Assets:Cash$54,900 (Year 2 Net Operating Income: $935/m)Fixed Assets:Condominium 1$455,000Total Assets:$509,900Liabilities:Accounts Payable:$33,360Notes Payable:$125,840Total Liabilities:$125,840Owner's Equity:Retained Earnings:$54,900Common Stock:$455,000Total Owner's Equity:$509,900Net Worth:$384,060…and so onAlthough not real, this is just an example to illustrate what I naturally do.I understand how rough this is as I didn't include depreciation and all that fun stuff, but do any of you brainstorm storm like this when trying to see the big picture?

She illustrates a situation though were she helped a cash buyer purchase a home for less than they might otherwise have spent.

Refis, especially cash out are notorioulsy more conservative but with purhases many of the appraisers take a property's purchase contract to be illustrative of true market value.good luck

MikeOH,Actually, that is the 2% rule that you illustrated there.

Garage and storage spaces are not rented.Here are current numbers (have included 4th unit rent for illustration purposes and assumed 10% vacancy):Ask price: $99kRevenue annual: $18,360Non debt exp: $13,111 as I assume ppty management later, and the owner's electric meter serves garage and storage units also.