Citigroup's fourth-quarter profit will be reduced by as much as $7 billion because of losses from subprime mortgages, which led to the departure of CEO Charles O.

That's going to make your expenses more like 65-70% of rent, if you just increment the 50% rule up by the "extra" taxes.Jon

Not sure how you're getting those lower numbers.With rent of $3000, the 50% rule would give you NOI of $1500.

I know there is a lot of paperwork and many rules and regulations to deal with.

There's a general rule that you become the average of the 5 people you hang out with.

Rents are 725 a side.This does not conform to the 2% rule, but we are in a great neighborhood which in the long term I will see nice appreciation and this area has the best schools in town, so easy to rent.Gentlemen owned 5 of them and has been foreclosed on.

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But the 2% rule shows $2100$815 (Mortgage Pymnt of $630 (ish) 6%, Taxes of $105, Insurance $80 ish)$815 + $837.50 (50% of rent)= $1652.50$1675 rents-$1652 = $22.50 If you keep maintenance costs down to $837.50 per month you have a cash flow of around $22.50 = $5.62 per unit?

noob here.....Can someone explain the 50% rule, 2.5% rule.....I can't seem to find a definition for it.Thanks.Jim

In many locations now, its common to also pay some of the buyers's closing costs.The rule of thumb is that if your purchase plus closing costs are under 70% of the ARV (what you can quickly sell for after fixup, which may be less than comps), you will make 10-15% of the ARV as profit.Jon