Throughout the United States, operating expenses run 45% to 50% of gross rents (gross scheduled rents).

at that level of investment, your renters could buy cheaper than you could rent it to them after you factor in your profits and operating expenses....

I operate in a new area and have been shocked by the type of potential tenants I have been encountering to fill my units.

troyce,The 50% "rule" is nothing more than the fact that throughout the United States, operating expenses run 45% to 50% of the gross rents.

Over the years I have found that real estate investing communities are tight knit groups and word gets around quickly amongst investors and agents if someone operates in a less than above board manner (not that you would, I'm just saying).My general rule of thumb is that if someone gives me the lead then I go out of my way to make sure they get paid.

Just Do It" is excellent advice if you're buying a pair of tennis shoes, but terrible advice if you're starting a business (and operating rental properties IS a business).

Even more specifically, if you are in DC Metro (would love to meet people operating in the DC and Northern Virginia area).

One glaring clue is that the e:mail correspondence will be disjointed and feel awkward to read -- spelling will be accurate, but phrasing and sentence structure will not be of the caliber you would expect from a highly-educated professional.Variations on this scam can be very sophisticated: Some operations have "mules" on the ground here in the states, and most of the time these people will not know they are pawns in the scam.

He told me he got out of the business because, in part, he could not "operate" in a physical manner with deadbeat tenants.

So I basically have seen two basic formulas on these message boards to determine whether or not a property is a good buy.For rehabbing: (ARV * 70%) - repairs = Max Purchase PriceFor Renting: Rent * 50 = Max Purchase PriceI would like to buy a property to Rehab, but be able to fall back and rent it if I can't find a buyer quickly... while also having positive cash flow after mortgage and operating expenses.If I put an offer on a property for $25k and the ARV is $50k (if I put in all new flooring, paint, and redo the kitchen and both bathrooms) that leaves me $10k (According to the formula) for repairs which I could likely do if I'm doing it all myself.BUT...That would have me with $35k into the property, and I am only confident of being able to rent for $600...