PROPERTY INFO4 BR, 2.5 BA near Little Rock, AR$31,980 cash purchase (20% down, 30-year fixed)Property valued at $159.9KINCOME: - Rent: $1,295/mo (Year 1), with $50 monthly increase in Year 2 EXPENSES (Total $1,230.61): - P & I (30-year fixed at 4.75%) $667.29/mo - Property Management (10%): $129.50/mo - Property Taxes: $163.67/mo - Homeowners Insurance: $50.40/mo- Repairs/CapEx (10%): $129.50- Vacancy (7%) = $90.65RETURNS: - CoC = 2.42% @ $64.39/moQUESTIONS: 1.

When running various rent price (income) scenarios to see the impact on your monthly cash flow, you are "penalized", in a sense, for increasing the rent price.

And thanks for the pointer @George Blower - I'll take a look and see if that increases my options!

For the most part,  the intentions are noble,  and in some areas like seattle,  issues of affordability are increasing and very real,  even to people with good blue collar jobs.  

This will increase the sellers transaction cost which will increase the purchase price. 

If you can leverage after rehab and increase the COCR to 10%, it would work.

You may be showing as repair cost which is increasing your total expenses in Sch E so your have less income in that year which will effect your DTI.

I love in Clarksville as well and looking to increase my portfolio and network as well.

Over time rents will slightly increase while mortgage interest will slightly decrease but you can probably look at the "right amount" of debt to offset that (again, along with depreciation).  

So if you take that same property and are able to increase NOI (by lowering Operating Expenses or increasing rents) by $50,000, you have created $625,000 in value!