LA has a such a strong rental market, that you usually will not have to account for as much vacancy as you might in other markets.

There is the issue of rents and financials being manipulated, vacancy not being true or other misleading claims, but we'll skip that side.I don't know Lakewood, but I'd first protect my money by knowing my market, the local regulatory issues and code requirements.If you are going to invest as a slumlord, find out how life is with slumlords in your area.

For your property at $600/mo if you wanted to purchase the property and follow the 2% rule you shouldn't pay any more than $30,000 including any repairs you might want to make to your property.The 50% rule is generally stating what % of rent will be taken by taxes, property management, vacancy, maintenance, etc to allow you to have a rough idea of monthly cash flow before Principal and Interest.

Being too lax about filling vacancies.

So just found this property with a suppposedly "motivated seller" here are the numbers: Proposed Sale Price 185,000 Gross Rents - 1800 Less 8% Vacancy Loss <144>Less Insurance <44>Less 10% repair budget <166>Less Tax <180>Less deb service <1055> (80% at 4.875, 20% HELOC from Primary Residence at 4.5%Net Monthly $2168.3% Cap and the agent I work with likes the property and appreciation potential.Both units renovated 2 years ago.Thanks!

Typically they will charge 8-10% of gross rents monthly, and 1/2 a month's rent when filling a vacancy.

In addition to PITI and other operating expenses, you need to factor in maintenance reserves, vacancy loss, etc which may not be actual expenses you are paying out of your pocket at this moment but will be at some point in the future.

Also, getting to the net operating income (NOI) is different for nearly everyone as most people are going to apply different variables to the equation (management fees, vacancy rates, etc).

You have figured in nothing for reserves for capital expenses while you have figured in some vacancy you haven't added enough for other turnover costs.

.$151 MIP (PMI)$210 taxes (it’s about $2500 annual)$66 insurance$673 vacancy, repairs, utilities (does this seem too low?)