Posted by WilliamGA on May 23, 2000 at 20:52:25:
When you are calculating cash flow, you need to consider things like a vacancy factor and repairs. Not knowing your area, I would plug in 10% for vacancy. Add to that 50 to 75 bucks a month for repairs(again, I do not know things like how old the house is or how much deferred maint. there is. The figure could be higher but I wouldn’t count on it being less)and I come up with a negative 20 to 40 bucks a month.
There are many things to consider besides just your monthly payment and the amount you can rent it for, Roland.
Talk to the owner and find out what he needs. There may be a way to work out a deal that will give you positive cash flow here, just make sure you consider all the elements.