Run a break even analysis, not hard and it's it's not a ratio.Look at the ARV and costs estimates, add your fluff for overruns, then look at market rents and vacancies, etc.....will it work?

These are all questions for a local realtor who can run comparable sales analysis if you cannot.  

Without a specific goal it's easy to get sidetrack or do endless analysis.3) Lean as much as you can about your focus.  

Look for my post titled 'First Analysis-4plex in Minneapolis' in the deal analysis section.

Built in 2002, it is a fully rented four plex (one unit is month-to-month so we would move in there).Current asking price: $495,000 (though originally listed at 474k, he upped the price after 16 days)Days on Zillow Market: Over 100Reason for Selling: To either purchase a SFH for himself and his GF or buy a commercial property, possibly storage unitsRents: 4,400 monthly (Owner said 2 units could be easily increased by $50 to $75 each)Expenses (annual)Property Taxes (assessed 2014): 7,754Insurance: 3,000 (guess)Maintenance & Repairs: 4,200 (guess)Utilities: 4,500 (average for last 18 months from water company, owner currently pays water/sewer/trash but there are separate water meters so we would look into passing this to the tenants as the leases expire)Advertising: $150 (only advertising is for new tenants when leases expire)Administrative/Misc Costs: $150Mortgage Insurance: $6,501 (from mortgage broker at 490k loan level)Snow Removal: $1,500 (as acountants, our busy season is during the winter and we don't have the time or patience to deal with this, there is a sidewalk + steps + driveway and back parking area to be plowed)Lawn Care: $150 (supplies fund, we will mow it ourself, first year expense of a lawnmower not included)Mortgage: 26,579 (FHA, 3.5% down, 3.75%)At 495kAnnual cash flow: $-1,684CoC: -9.72%NOI: 24,895Total ROI: 40.89%At 450k (keeping mortgage insurance at 490k loan level b/c I don't have other numbers)Annual cash flow: 762CoC: 4.84%NOI: 24,895Total ROI: 55.54%As it stands, my numbers are telling me this deal will not work, given the $100/mo/unit minimum standard most people are looking for here.This is the first deal that I have really looked at though as seriously buying, so I would love other people's opinions on my analysis.

Run the 70% rule analysis and then start crunching numbers if it makes more sense. 

Guys,I have done many deals but this one I am not exactly sure how to get it to work out for everyone.I know someone who bought a property for 115k originally . The market has turned and they can't get that much now. ...

Thanks for the detailed analysis.

@VAL AUSTINIf you are in San Diego, I would get a CMA from an Agent and a Rental Analysis from a Property Manager.Then sign a 1 year lease with possible extensions of market rent.Then an option to purchase with 3% option payment (non refundable), strike price can be a trigger of either X dollars or new appraisal whichever is higher. 

My analysis is already factoring in a 250$ reserve (~15% gross income).