2020 Built 5 bed/ 3.5 bath + 2bed/1bath ADULoan Balance: $624k Purchase Price: $725KEstimated value: $1,450,000Gross Annual Income: $ 147k in 2023/ projected to make $165k in 2024(possibly more)Annual Expenses: $92k Including mortgage, cap ex., cleaning and operating expenses Monthly cash flow: $6,083 self managingMonthly cash flow: $4,300 with cohostROE: 6.4% Thanks for your input!

After keeping out cap ex, vacancy, etc I cash flow $450 with no mortgage. 15% return CoC vs 8%, instant liquidity (on the cash flow), plus I own a physical asset and get the tax deductions vs paying taxes on dividends. 

(Purchase) cap rate is easier to say than "unleveraged ROI".Math aside, as you mentioned, you will want to include vacancy, cap ex, repairs and other expense paid for by you.FYI...your return on paying down debt = 5%.Hope this helps.  

But they will leave things off like cap-ex, vacancies, management fees (if the owner self manages).  

if you don't have the cashflow to set aside for repairs and cap-ex, your probably bought a bad deal.But hey, its all good, those are the guys on my mailing list!

What I consider real gambling is buying TK properties and underestimating PM costs, underestimating long-term cap-ex costs, underestimating tenant turnover costs and also believing everything the provider says....not to mention, purchasing an SFR in an area with demographics primarily composed of renters and a median income that will never drive up SFR prices (which typically happens when neighborhoods are predominantly owner-occupied), and in the middle of neighborhoods whose appraisals are artificially inflated by other TK property transactions.

For ex: they found 1 dead cockroach and called exterminator services which was approved by PM and was never communicated with me and they deducted from my rent. 

Wow, I learned a lot from you James, so to summarize:- the 30YFRM is introduced as many ex-soldiers are re-entering the society and US economy is started the credit-based economy ; it's almost like the Korean war created the 30YFRM product.- however, the 30YFRM doesn't create a bull run in real estate except during mid of 1970s, there were several things happening in the 70's : the disconnection between gold and the dollar and creating a disconnection between wage and productivity; and the massive inflation due to oil shortage of OPEC embargo.

If rent is $1600, then 10% for PM, some percentage for cap-ex, vacancy and repairs (since its newly rehabbed maybe 15% for all that), that gives you barely $200 cash flow?

For an ex-military man who considers doomsday scenarios, Orlando has the added appeal of sitting high and dry well above sea level for the sake of flooding and hurricanes.