@Dan...I'm fairly new at investing as well. 20+ Cap Rate=Good Deal in my book.

I have only dealt with single family homes so I currently have fixed mortgages.I desire a CAP rate of 10%That beign said NOI / desired cap rate = selling cost.

There were some extras including disposal, capping, and potential other upgrades.

(The all caps part is in huge letters in my lease)It's a hassle having to mail the bills each month, but better than getting stuck with a $2,000+ water bill.

Here goes:DuplexPurchase Price $55,000Rents: $1,075 ($550 and $525) Each are 2/1Property Tax: $925Insurance: $700Maintenance, PM, Vacancy: 10% eachUtilities: All payed by Tenants (separately metered)Financing:Down Payment: $13,750 (25%)Loan Amount: $41,250Closing Costs: $3,000Cash Outlay: $16,750Interest Rate/Term: 4% @ 30 YearsMonthly Mortgage: $197NumbersMonthly NOI: $646Monthly Cash Flow: $449Cash ROI: 32.14%Cap Rate: 14.09%Heres some info on the Property:Pros:1.

(I am a buy and hold).I wish I could buy in LA for 10% cap rate!

For all concerned.Acronyms*REI Abbreviations**AFD* - Agreement For Deed*AITD* - All Inclusive Trust Deed*APR* - Annual Percentage Rate*ARM* - Adjustable Rate Mortgage*ARV* - After-Repaired Value*ATR* - Ability to Repay - See CFPB*BOM* - Back On Market*BOR* - Board of Realtors*CAD* - County Appraisal District*Cap* - Capitalization*CCIM* - Certified Commercial Investment Member*CCR* - Conditions, Covenants, and Restrictions*CFD* - Contract for Deed*CFPB* - Consumer Finance Protection Bureau - See ATR*CLTV* - Combined Loan To Value*CMA* - Comparative Market Analysis*COCR* - Cash on Cash Return*COF* - Cost of Funds*COO* - Certificate of Occupancy*CRB* - Certified Residential Broker*CRE* - Creative Real Estate*CRS* - Certified Residential Specialist*DBA* - Doing Business As*DCR* - Debt Coverage Ratio*DOS* - Due On Sale Clause*DOT* - Deed of Trust*DSCR* - Debt Service Coverage Ratio*FCRA* - Fair Credit Reporting Act*FED* - Created the CFPB*FFE* - Furniture, Fixture, and Equipment*FHA* - Federal Housing Administration*FHLMC* - Federal Home Loan Mortgage Corporation, Freddie Mac*FMR* - Fair Market Rent*FMV* - Fair Market Value*FNMA* - Federal National Mortage Association, Fannie Mae*FRBO* - For Rent by Owner*FSBO* - For Sale by Owner*GMAC* - General Motors Acceptance Corporation*GRM* - Gross Rent Multiplier*HELOC* - Home Equity Line of Credit*HML* - Hard Money Lender*HOA* - Homeowners Association*HUD* - Housing and Urban Development*HVAC* - Heating, Ventilation and Air Conditioning*IRA* - Individual Retirement Account*IRC* - Internal Revenue Code*IRR* - Internal Rate of Return*IRS* - Internal Revenue Service*L/O* - Lease Option*L/P* - Lease Purchase*L/S* - Landlord Seller*LIBOR* - London Interbank Offering Rate*LLC* - Limited Liability Company*LOC* - Line of Credit*LOI* - Letter of Intent*LP* - Limited Partnership*LPOA* - Limited Power of Attorney*LTV* - Loan to Value*MAI* - Member Appraisal Institute*MAO* - Maximum Allowable Offer*MIP* - Mortgage Insurance Premium*MLS* - Multiple Listing Service*MUD* - Municipal Utility District*NAR* - National Association of Realtors*NIV* - No Income Verification*NNN* - Triple Net Lease*NOD* - Notice of Default*NOI* - Net Operating Income*NOO* - Non-Owner Occupant*O/F* - Owner Finance*OO* - Owner Occupant*P&S* - Purchase and Sale*PITI* - Principal Interest Taxes Insurance*PMI* - Private Mortgage Insurance*POA* - Power of Attorney*PUD* - Planned Unit Development*REI* - Real Estate Investing / Real Estate Investor*REIA* - Real Estate Investors Association*REIT* - Real Estate Investment Trust*REO* - Real Estate Owned*RMLO* - Registered Mortg Loan Orginator*ROI* - Return On Investment*RTO* - Rent to Own*SFH* - Single Family House*SFR* - Single Family Residence*Sub2* - Buying property subject to existing financing*T/B* - Tenant Buyer*TAA* - Texas Apartment Association*TAR* - Texas Association of Realtors*TIL* - Truth In Lending*TREC* - Texas Real Estate Commission*UBIT* - Unrelated Business Income Tax*UCC* - Uniform Commercial Code*VA* - Department of Veterans Affairs / Veterans AdministrationFORUM ABBREVIATIONS*AFAIK* - As Far As I Know*AFK* - Away From Keyboard*AKA* - Also Known As*BBIAM* - Be Back In a Minute*BFN* - Bye For Now*BRB* - Be Right Back*BTW* - By The Way*CUL* - See You Later*FYI* - For Your Information*G2G* - Got to Go*IMHO* - In My Humble Opinion*IMO* - In My Opinion*LMAO* - Laughing My *** Off*LOL* - Laughing Out Loud*NT* - No Text*ROFL* - Rolling on the Floor Laughing*ROTFLMAO* - Rolling on the Floor Laughing My *** Off*TIA* - Thanks In Advance

I dont disagree with Karen Margrave about the land behind the Orange Curtain, tho' for the rest of us in Southern California, this market makes me sick.Prices cap rates on commercial property, SFRs are all overinflated, I have sidelined my money and also started looking at other states to invest my food stamps. . .I came across a great article in WSJ, let me dig it up:http://blogs.wsj.com/developments/2013/01/22/six-reasons-housing-inventory-keeps-declining/Hang in there all, normalization will DEFINITELY happen. . . in the next 50 years!

Very rough but fairly conservative estimates: CAP rate= 5.5 %, fits very close to the 50% rule (~48%), cash flow/initial investment= 5 %, NOI ~ 17k, etc etc.

At 299,000 you are getting with your about statement we will say 580 a unit.580 X 4 = 2,320 a month X 12 = 27,840 potential yearly gross income.27,840 times .50 costs if no landlord paid utility = 13,920 NOIIf landlord pays utility like water etc. then go .60 costs=11,136 NOIOne way at a 10 CAP you have 139,200 sales price and the other way with landlord paid utility you have 111,360 sales price.