Looks like mortgage is over $4K/month on a 30 year mortgage.Purchase Price $950,000Down Payment $70,015 7.37%Mortgage Insurance 35000Closing Costs $18,000.00 4% $18,000.00Interest Rate 4.25%Term in years 25Financed Amount $914,985Payment $4,956.82Renovations/Repairs $20,000Out of Pocket Costs $108,015Monthly Assumed % Manual InputRent $6,000Property Mgmt $480 8.00%Vacancy $300 5.00%Maintenance/Repairs $180 3.00%CapEx $45 0.00% 45Insurance 50 0.00% 50Property Taxes 419.7 0.05% 419.7Rental income tax 0.0 25% 0.0Expenses Subtotal $1,475"Annual % Increase(rent + expenses)" 2.5%1% ruleGross monthly rent should be >= 1% to total purchase price0.63%GRM (Gross-Rent-Multiplier): the lower, the better13.2Cap Rate (Net operating income (annual) / total purchase price): the higher, the better5.72%Net Income After Financing (/mo.) = Net operating income - financing costs-$432years Monthly CashFlow1 -$4322 -$3183 -$2024 -$845 $386 $1637 $2918 $4229 $55710 $69511 $83612 $98113 $1,12914 $1,28115 $1,43716 $1,59717 $1,76118 $1,92919 $2,10120 $2,278 

In other words, the adjusted rental income (75% of the gross rents) must be sufficient to cover the total mortgage payment of the property.Example of the FHA Self-Sufficiency Test Calculation:Gross Rental Income: Assume the appraiser estimates the total gross rental income from all units is $4,000 per month.Adjust Rental Income for Vacancy: Multiply the gross rental income by 75% to account for vacancies and maintenance costs.$4,000 x 0.75 = $3,000Monthly Mortgage Payment: Assume the total monthly mortgage payment (PITI + MIP) is $2,800.Result:Since the adjusted rental income ($3,000) is greater than the monthly mortgage payment ($2,800), the property passes the FHA self-sufficiency test.Importance of the Test:The self-sufficiency test is crucial for borrowers looking to finance a 3- or 4-unit property with an FHA loan.

Don't start buying the cheapest thing you can find, you'll end up spending WAY more- especially in a MFH, you'll be multiplying your losses. 

John, to circle back to something I just noticed about your explanation of "flat rate" billing, they actually did send me an itemized quote that included 'Labor hour(s)' multiplied by 'Hourly rate.'

Tell the rich guy that has seen it all and done it all how much they don't know...yeah, that seems sound.Whatever happens, your outcome will be multiplied.

            - For any part of the project that you finance, whether it be purchase, the rebab, or both, do you simply look at the monthly loan payment for that leverage and multiply that monthly debt service payment by the number of months you expect to hold the property?           

Divide the total bill by the number of inclusive days to get a prorated amount, then multiply that by the number of days occupied by the tenant, deduct from their deposit, refund the remainder.

You find out what the existing purchase was and multiply by 25% (has to be over $144K)Example: Home bought 2 years ago for $325KEntitlement used/ Entitlement Gurantee = $325K * 25% = $812502.

Take that and multiply it by every part of a property that can be damaged and you see why the insurance companies are losing so much money.To put it in perspective if the mortgage industry was losing money like this no one would be able to get a mortgage - period end of story.

Crazy way to multiply liability on seller financing.