Purchase Price: $174,900Mortgage: $838.89 with 20% down @ 6% and 5% closingCash Outlay: $43,725-Income-Rent: $1900/month (optimistically)-Expenses-Maintenance: $190/monthVacancy: $190/monthProperty Manager: $0 (self PMed)Insurance: $115/monthTaxes: $510/month (ouch)NOI: $16,860CoC: 1.54%CAP: 12.52%Profit: $27.99/door/monthI would have to offer $130,000 on this property to make $200/door/month.

Brandon Malone, I'm still pretty optimistic in my market, for a few reasons.

That doesn't even hit the classical 1% rule of thumb, which I think it overly optimistic.

Maybe I'm just to optimistic

However, I'm not optimistic that we'll be eligible for a conventional loan so I'm exploring other options.

I've been paying additional to principal, plus my house has seen 25% appreciation since I bought it, so I was optimistic that I could get the MIP removed.

The only time you are going t have to figure in floating interest rates is when you have variable rate loans.Rates got as high as 16% in one of the bad inflationary periods of the recent past. so your 8% is a little optimistic.

Doesn't take much to get that ratio up much higher, or even over 100%.Even a very optimistic 35% ratio (that's $100 more than your PITI payment) generates a $24,500 loss over 10 years.

I check the data against what the others have said to make sure they are in the normal range and not just irrationally optimistic.

Everyone who's every asked me for my buying parameters asks about the ratio I'm looking for.I should also say that they're ARVs are consistently optimistic, and I do check myself to see what I think.