A couple questions for everyone on building good pro forma analysis before I get in touch with a seller.1) How do you determine a vacancy factor for a 3-4 unit property?

Another issue is loan costs, factor those in on 2 loans (if you can cash out with a secodary market loan) and then consider the APR.

If I am at risk in the transaction, acting as a principal is another factor.

My guess is the biggest determining factor in your search has to be location.

I just inspected a property yesterday, and got my first real look at it.Here is the information:Asking Price: $15,675On the Market: 79 DaysComparable Comps: 25-35K (I believe this to be a little low right now (The area just a few years ago was roughly 55-65K)Expected Rent: $500 to $600I did not factor in Closing Costs, but I figured a $7,000 bid offer with a contingency for inspection.Since most of my cash will be used up in the initial purchase, I plan on using the property as collateral to secure a personal loan for $12,000 at 7.5% (Not sure if this is too high) over 5 years.I assume that I got the COC correct?

I watch a few different factors when gauging the swings that are likely in the apartment market.Supply, jobs, barriers to entry, and interest rates.This may sound simplistic but it works well for me. 

All I got is my name and I strive to be a person of integrity.

He has to step up to the plate on this and keep his integrity intact.

@Ali Boone Hi Ali....Go Go Dancer eh...way to go...If we talk live I'll share one of my life long dreams along those lines ;0) I really like the economics of Austin...the growth factor including jobs and the large companies there creating the draw!

Dana is correct, Fannie, Freddie, USDA, FHA and VA will assume to be QM following those respective guidelines.Ratios can still go to 50% with compensating factors and there are exemptions for regulated lenders where the assumption will be made that a mortgage falls in the QM guidelines or they may originate a high risk mortgage with limiting loan conditions.