Posted by Ronald * Starr(in No CA) on September 24, 2003 at 24:17:25:
I look at a very crude ratio: monthly projected income divided by asking price. High ratios are good, low ratios are poor. I like to see at least 1.2%.
That is for rental properties. For quick turn-over properties I want to see a potential purchase price of well below 80% of market value. Preferably below 2/3 of market value. Then of course, you have to subtract out expenses to fix up and holding costs.
Of course, with less down, one can afford to pay a little more, since your return on investment will be higher than when you have a high down payment.
Good InvestingRon Starr*****