That makes your P&I $1757 a month.Given you're going to self manage, I'll peg expenses, vacancy, and capital at 36% of gross scheduled rent.

Let me expand on @Jeremy Cyrier 's very good advice (and I am SO glad that someone is saying cash-on-cash return is inadequate because it fails to take time value of money into account)In simplest terms, you need to project your cash flows over a reasonable holding period, and then perform an internal rate of return calc.To estimate your year one cash flow, start with the gross rent and subtract an allowance for potential vacancy and credit loss (at least 3% but probably more since one lost month's rent in a SFR is 8%).

Rent yields drop precipitously as prices go over $100K in most places.Also, regarding expense assumptions on the expensive homes: taxes and insurance will be a much higher percentage of gross rent, so I think this essentially offsets the other issues.

1) Proof of funds - bank statement for the past 3 months showing a bank balance of a minimum of 6 times the monthly rent. 2) Proof of Gross Annual Income - Household annual gross income must be at least 3 times the annual rent.

I welcome any comments or suggestions since this completely new territory for me.Additional info: business is located in TN, start-up capital is relatively small (~30k), and a previous restaurant at the location reportedly had gross sales in excess of $1M but failed due to poor management.

Correct me if I am wrong but I feel like for this investment to be worth my while, I need to get the a lower price and interest rate. ..."1% rule" = purchase price of 100 times monthly rent; 180 times is like a 0.56% and that is a recipe for disaster.Depending on the rent you gross, 1% rule properties may be a break-even or losing proposition in the long run, especially if you are financing the acquisition.

Maybe you can spell out expenses and gross income so we can gauge the true value of your Net that will help with more input on what to work on for your next acquisition.

I was just doing my usual due diligence, market researchthere was this one MONSTER of a commercial multi-unit that was beyond our price range (6 tenant offices rental).but we thought it was way over priced. we thought it was worth 600k (old bldg), listed 980knet gross income was 80k/yr, it already has 80%-90% occupancywe were thinking an offer of 700kbut we thought that was too low an offer, and financing could happen if we tried hard enough.we ended up buying a few building down at a more affordable 150k.today I remembered the building.... chked in on loopnet. and it was still there!!!!

I'm really surprised at some of the responses....to do this full time i'd recommend people consider having 6 months reserves of living expenses and another 2x of what your monthly gross is before you go fulltime.So in that case someone with monthly expenses of 3000/month would ideally want roughly 18-20K of reserves before they even THINK about going fulltime.

From the gross profit, you pay back yourself for all of your costs (rehab, plus anything else, such as utilities).