My 2009 business cut back plan is simple...1- My lease ran out on my satellite office so I did not renew it SAVING $$6500.00 per year (rent, phones, internet, gas getting there)2- NOT buying a new or used car this year SAVING $$6,000.00 (in payments, interest & full coverage)3- NOT hiring anyone new this year SAVING $$27500.00 (but it keeps ALL the pressure on me)4- paid off almost all debt SAVING $12,000.00 in interest per year (commercial loans, high interest credit cards)5- Scaled back the cell phone plan SAVING $1200.00 per year6- NEGOTIATED with internet provider down from 65.00 per month TO $20!!!!

In an inflationary environment, fixed rate debt, such as a mortgage gets cheaper in real dollars over time.

J's income to debt ratio is a bit higher than 50%.

Your credit history, credit score, dscr, debt to income ratio, possible experience (depending on the investment), and the financials on the investment including, but not limited to, gross income, loss due to vacancy, all operating expenses, capital expenses, net operating income, debt service, and cash flow.

So far, it seems the TARP funds are being used to clean up banks balance sheets and to buy other banks, and the feds are getting a bunch of marginal or bad debt.

They have owned the property for approximately 11 years, so we're assuming 9 years left on the debt service.

Here are my calcs.Purchase price - $230,000Renovations - $50Kdown - 20% - 46KClosing costs - ~15KLoan amount - $184KMonthly debt - $1225 monthlyRE + Ins - $300 monthlyTotal out of pocket - $111,000 (pretty high)--------------------------------------------gross income - $44000operating expenses - 50% - $22000Debt - $18300Net Income - $3700 yearly / 12 = $308 or $102 per unitWhat would be the right purchase price?

In 2005 I started telling my members to decrease their debt load, unload marginal properties while the prices were approaching the peak and improve their cash position.

"To be frank, since the TARP money came in, they are still selling off (properties at auction), but they kind of took a step back." . . .Real Estate Disposition LLC (REDC), which claims to be the nation's largest real estate auction company, held 300 ballroom auctions in 2008 and sold nearly 33,000 foreclosed homes for $3.4 billion -- a seven-fold increase in sales volume and nearly triple the proceeds the company generated in 2007.Company CEO Jeffrey Frieden said he expects to "smash that record" this year as banks and lenders continue to amass a huge inventory of foreclosed homes and are more motivated than ever to sell their inventory. . . .Some observers fear that if the massive amount of debt the government is taking on to stimulate a recovery, inflation -- and higher interest rates -- are inevitable consequences.

The foreclosure wipes out the debt, and the property is now owned by the auction winner.