Building currently grosses 4k/mos and would gross 7k when at 100% occupancy.

An ESTIMATE you can use for evaluating the deal is that the NOI will be 50% of the gross scheduled rent.

Remember this is on gross income.Olden days said one weeks pay for rent.

The owners of the rigths would get a fraction of the gross revenues generated by the production.

Our numbers would be Gross Rent Income-$26,400 NOI-$18,343Debt Service-$10,800Cash Flow-$7545 or $629 per month, $4377 or $365 per month with 12% vacancyCap Rate-13.90%There are 6 Units in the building, 1 BR-$300 and 2 BR-$400There is only one vacancy right now.

The "50% rule" simply says that operating expenses (per IRS regulations) plus vacancy (actual or economic) plus capital (expenses you incur in one year buy must amortize (deduct) over multiple years) will average out to about 50% of the gross scheduled rents.

Thanks Christine.You and others have lots of great ideas.There are 20 units total.Rehabbed units get 950 a month.Other units we have that need work get 780 to 860 a month.I want to get them all above 900 with the improvements.The property management fee is usually 5%.Instead I have a PM I can trust a child hood friend that is doing an excellent job.He is going to be an onsite PM living in one of the units.I will expense a payment to him for the PM and then he will pay rent to show gross income on the property.There is an opportunity for more units on the same street so I might acquire more.I can't run them day to day because of my commercial real estate brokerage I own.I figured an onsite person will keep the tenants in check.Thanks for the help.

I'd be looking at renting the house, which is a single family raised ranch for 1800-2000 gross although that hasn't been confirmed yet.My current payment is 1370.66 although I can also look in to refinancing from 5% down to 4.3 or so and also doing away with my PMI.

I don't think I would enjoy real estate as much if I have to do so much on every new purchase, plus each property I buy grosses on average $1000/month or $500/month after expenses etc.., if you hire an attorney, get an LLC, a land trust, pay for addresses, maybe pay someone to be partner, that will basically eat away most of the cash flow left.

Option 1: 5 rental properties paid in full every year with rents equaling in gross $1200/mo each.Option 2: Rehabbing 12 properties every year with a net profit of $25k each property.Option 3: Wholesaling 48 properties a year with a $5k profit on each property.And you can repeat the process over and over for however long you wanted.