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.

Would you be willing to share how this approach has worked for you?

A balanced approach often works best—consider splitting your cash flow between paying down the mortgage and investing in diversified assets.

I’m looking to access some of the equity in the home to buy out my ex-partner, and my goal is to either convert the house into a multifamily property or add a dwelling unit (ADU).I’d love to hear any advice from the community on the best way to approach this, particularly in terms of financing options, legal considerations, or any similar projects you've completed.

We approached them a year into a five year owner financing and asked them if they were considering cashing us out as well.

Sometimes, the more old-school approach like posting on local community boards can help you find reliable tenants.

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.

What is your current approach to lead generation? 

There are a couple REIAs in the Tri-State area, but none of them are backed by the power of BP and the incredible people that it tends to attract.

Focusing on smaller multifamily properties needing light rehab is a smart approach for learning the ropes.