I don't think the question was about the investment as much as the analysis process.When I run a projection like this, I like to make it kind of a "what to expect in the first year" scenario.I also include projected tax benefits, equity buildup (amount of principle paid) and somtime include some estimation of appreciation.So, using your numbers (and a couple of my own assumptions), this is what I get:Your Assumptions:Purchase Price $250,000.00Down Payment $50,000.00Loan Term 30 yearsLoan Rate 7.80%Yearly Income $33,495.00Yearly Expenses $11,412.00My assumptions:Property Appreciation3.00%Buyer's Tax Bracket30.00%Depreciation- Land 20.00% Building 65.00% over 27.5 years Personal Property 15.00% over 5 years1st Year Benefits:Cash Flow$33,495.00Income-$11,412.00Expenses=$22,083.00Net Operating Income $1,439.74Monthly Payment*12Months=$17,276.89Debt Service $22,083.00Net Operating Income-$17,276.89Debt Service=$4,806.11Cash FlowTax Shelter$22,083.00Net Operating Income-$5,909.09Building Depreciation-$7,500.00Personal Property Depreciation-$15,538.73Interest Paid$-6,864.82Taxable Income / Loss $-6,864.82Taxable Income / Loss*30.00%Tax Bracket $2,059.45Total Tax Effect (You save this much in the first year on your taxes...)EquityIn the first year's payemts, $1,738.16 of principle will be paid.AppreciationA property worth $250,000.00 whose value increases by 3.00% per yer will increase in value by $7,500.00 in the first year.Total BenefitCash Flow + Shelter + Equity Increase + Appreciation = $16,103.7132.21% return on down paymentIf you don't like to include Appreciation, then you getCash Flow + Shelter + Equity Increase = $8,603.7117.21% return on down payment

One of the main benefits of buying Real Estate is the future appreciation and equity.

Originally posted by Kenneth LaVoie:I am only a "two year" newbie...That means that thread was started THREE YEARS before you started investing...Not that big of a deal, but for everyone's benefit, let's try to start new threads if the information is interesting enough to open up a several year old thread...

I am sure it is but not sure exactly what benefit she could be getting to make it a little easier to be successful.

Another great benefit of living in apartments is that you have the freedom to get up and move at any time.

Adjustment is due in December and he cannot afford to pay the higher rate.

What would you like to learn from biggerpockets and how do you think you will benefit form it?

If it were a conflict of interest, the real estate agent would have a direct relationship that would benefit from the project (which does sometime happen).

In the long run, the only difference would be in what I'd benefit.

The ARM is going to start adjusting, but if you want to gamble and think rates will go down by when the rate starts to re-adjust, an ARM may be for you.