Justin Trudell I agree with everyone else when they say only max out to employee contributions.

I'm thinking the employees will have to live somewhere close by?

Do you look for three times their net or gross income?

I think Weese's class C Garland property grosses near a million a year in rent.

This means the gross income would be 1000/month.

It is simply the NOI (net operating income) - which is the gross income less all expenses, divided by the purchase price.

Maintenance was estimated at $1.10/SF and I used a 6% vacancy rate:Gross Scheduled Income $71,280Vacancy Allowance* ($4,276)Gross Operating Income $67,004Operating Expenses: Property Management ($7,128) 10% Gross Monthly Rent New Tenant Fee/yr ($2,970) ½ Month Rent per unit Property Taxes ($6,645) Insurance ($5,698) Maintenance* ($5,322) Trash Removal ($1,896)____________________Net operating Income $37,345All units have independent wells and electric meters.

It looks good to me, but nothing gets by the Deal Analysis Forum.Here are the details:Asking Price: $230,000 (I ran my numbers on $220,000)Units: (4) 2 bed / 1 bath, rent for $700 eachBuilt 1966Tenants pay utilitiesIncome: $700 x 4 = $2800 / month or $33,600 / year Expenses (per month): Insurance: $66Taxes: $346Vacancy: $280 (10%) Management: $280 (10%) Misc repairs/Long term capital expenses: $428^ I just took 50% gross rents and subtracted all other expensesNOI: $1400/month = $16,800/yearFinancing:$220,000, 20% down = $44,000Loan of $176,000 at 5% interest = $944 monthly payment Cash flow of $1400 – 944 = $456 or $114 / doorOR (if I Owner Occupy)FHA 3.5% down = $11,000Loan of $209,000 at 3.5% = $1,012 monthly payment NOI of $700 (since I will be occupying one unit) means cash flow of -$459 (assumed $147 of PMI added)This property is in an ideal location - great neighborhood, proximity to schools, park, and community rec center.

If you're not living there, you're probably looking at 20% down for a non-owner occupied rental property.When I run my numbers, I try to be as conservative as possible, ie: I want my expenses to appear high on paper, so when rubber meets the road, the actual expenses come in lower than my estimates, meaning more cash stays in my bank account.From the gross, I usually take 10% for vacancy, 10% for repair reserve and 10% for management.

I also walk them through the county buildings, introducing them to the clerks and employees they will have to deal with when recording documents, filing evictions, tax appeals, etc.Now for some, mentors that are cross county, may work.