. $2,500.00 MONTHLY INCOME$1,739.50 MONTHLY EXPENSES$760.50 MONTHLY CASH FLOW2.41% PRO FORMA CAP RATE$9,126.00  NOI$295,800.00 TOTAL CASH NEEDED3.09% CASH ON CASH ROI4.56% PURCHASE CAP RATEAfter Repair Value $379,000.00I will Sell the Property in year 3-5 years with a $92k-$139k in profit. 

IncomeRent: $3600Laundry: $50Sub Total: $3650Expenses @6% INTP&I: $1769Taxes: $317Insurance: $120Vacancy: $365Repairs: $365CAPEX: $365Management: $365Total: $3666Difference: $8As I adjust the offer price I get the following numbers:INT 6%, Price: 295000, CF: 8INT 6%, Price: 275000, CF: 128INT 6%, Price: 275000, CF: 278I would personally manage the property allowing me to save the 365/mo in management fees for the first few years.2. what are your expenses every month?

My attic has the potential to become a single bedroom apartment (kitchen/living on 1 side, bathroom central in attic, bedroom/living on the other side).The "Total" renovation... as I see it would be the following.Floor #1 - Bathroom is currently 1/2 bath.

It is, however, an option and for the right deal it could totally be worth it.

POPULATION 1 MILE 5 MILES 10 MILES TOTAL POPULATION 1,857 45,944 194,648 MEDIAN AGE 45.3 41.1 45.6 MEDIAN AGE (MALE) 44.0 40.0 44.8 MEDIAN AGE (FEMALE) 46.6 42.0 46.4HOUSEHOLDS & INCOME 1 MILE 5 MILES 10 MILES TOTAL HOUSEHOLDS 775 17,852 79,799 # OF PERSONS PER HH 2.4 2.6 2.4 AVERAGE HH INCOME $50,353 $57,011 $56,327 AVERAGE HOUSE VALUE $174,711 $257,379 $232,066

Total rent $1,850.

Sucks totally but I wanted to sell the house and the buyer knew about it so I had no choice but to bite the bullet.

If you measure the totality of your investment, mean cash flow, debt reduction, appreciation, rent growth etc you will always make more money in the areas of high demand like DC, Boston, Seattle etc than you will make in a pure cash flow market like you will in the mid west.There is always the possibility of your rate going higher, but thats the trade off of a lower rate with the arm.

The total fee comes out to $250. 

I pay interest on the money while it's in use, secure it with a note and deed of trust on the property, and then split the profit's 50/50 or in proportion to the amount of the investment compared to the total cost.