To determine the cap rate 1) Calculate the yearly gross income which in your case is $68,520.00 check the books make sure rent roll shows the rents are as stated.2) Subtract the operating Expenses not to include mortgage and interest =$28,936.803) Net Income = $68,520-28,936.80 = $39,583.204) Cap rate = Net Income divided by purchase price $39,583.20/400,000= 9.8958%Investors usually will use cap rates to compare properties in a neighborhood.

What I didn't mention is that she became a real estate agent last year to get an "insider" view of the factors going into real estate transactions, including the sometimes unforgiving taxes.  

That included getting a team in place, educating myself here on BP and other books, actively looking at the market to identify where I wanted to invest, determining my strategy, realizing there was a flaw in my plan, finding a private investor, and finding a deal that met my criteria. 

My spreadsheet for the property included an initial capital infusion at the outset to create a cushion to absorb unit turn overs, cap ex, etc until flow could catch up.  

Now, In my first offer I included an inspection contingency and also it is all cash offer, the bank countered for Highest and Best, due to multiple offers.

It's not a good investment for MY money, and my alternatives include small multi's that we've been buying over the past 6 years in SD.  

The whole theme is pink to include the toilet and the tub.I'm considering leaving it and taking a hit on the selling price.  

As long as they are paying you in full, with late fees included, around 2-3 weeks late, and even if they did this every month, I would be fine with it.I own right at 25 properties, and about 6-7 of them are usually between 5 days to 25 days late each month. 

There are many reasons for this including tax and liability issues.

Although the divorce decree stated that she would try to refinance to get me removed from the home mortgage, she has been unable to do that and so I am included in this HAMP modification and still on the loan for that home.