Here is a deal i am looking to buy in the next 2 months.Demographics profile.Median home price in this cluster is $380,000Median household income is $140,000High school ranked #5 in state: middle school #3 in state and elementary #2 in state.No apartments and multi-family and lowest rent listing is $1700.00/month and the rental inventory in this area is 1.7 months.I am looking to buy a new construction SFR 4 bed/2.5 bath 2800 sq/ft on .25 acre lot.Price: $170,000Rent: $1700Mortgage: $608.70HOA: $50Insurance: $50Tax: $141.66Down payment $42,500 - 25% down$10,195 annual cash flow24% cash on cash returnAt the moment, I don't have much rehab skills but from my limited experience my rental that I bought new in 2006 has been rented to a corporate executive transfer for 6 years now.

Remember that household cashflow is based on the payment, not based on the rate.

I spent countless hours analyzing economic data, home prices relative to average household incomes, crime stats from the FBI, school quality, etc. for the entire northern California region before identifyinf Elk Grove as underpriced.And then I saw BP and you guys posting about values in TX.

Step 2, Review your household expenses and find ways to either cut unnecessary debits each month.

Your thoughts and suggestions would be greatly appreciated.FYI: we will be still working on our current jobs with the annual household income $120k and would like to have enough money to support our two kids when they are in college in next 7-9 years from now.Thanks,Petalpha.

We will be a dual income household in January - She just got out of school.

Lending guidelines say 43% debt to income ratio, so if no other debt, a factory working household can spend $2200 a month on a house. 

You will meet with each household and introduce them to your management style and written rental agreement.

Legally, business purpose loans as these are pretty straightforward.If you are talking about making second position real estate loans for personal, family, or household use (HELOCS for example), which many above seem to be addressing, then DF, the Safe Act, RESPA, TILA, and everything else applies and you'll need the full complement of Broker, MLO, and NMLS licensing.

Work backwards from there and say okay I want 250/mo free cash flow from each property (use some of the calculations to give you a general idea of what your costs are, and cross reference those Median Household prices with places that generate the right rent numbers to make your search a little more specific.