I don't follow at all where you're getting the 16% rate on the $60K note to produce $5,400 of interest income, as you must be using your calculator erroneously, but...I'll point out that borrowing from a 401K for reasons such as you describe can typically be for a max 5-year fully-amortizing term, so if you borrow $50K, your monthly payments back to your 401K will be more than $900 P&I.

Hey @Ruben CorreaHonestly, I would save... but that's primarily because I err on more of the "less-risk/conservative" side.

Lots of folks suggest at least six months PITI, some say three months gross revenue...The condition of the property might be a factor- if you know you've got some older heating systems or something like that you might err on the high side, for instance.

Section 24 (O): We like to err on the side of caution here.

@Mark CreasonAnother erroneous assumption based on local practices.The correct answer: it depends!

Investors that look elsewhere to invest for cash flow either CANNOT afford properties at 5% caps or were erroneously led to believe that CASH FLOW = PROFITS which any experienced investor can tell you is NOT true. 

It's always advisable to err on the side of caution with regard to prohibited transactions, particularly with IRAs. 

If you don't know, err on the side of caution and give the longer notice. 

I understand that it is a frequent practice of unlicensed persons to have the property owner obtain an owner-builder permit that erroneously implies that the property owner is providing his or her own labor and materials.

If one doesn’t know the market it is highly likely some of the numbers entered into excel are erroneous and therefore are erroneous.