CASH FLOW A PROPERTY?

If there was ever an opportunity to buy property that cashflows this is it. To make sure that the property will cashflow, use the following formula. Charlie

Calculating Loan Costs
Purchase Price: \$200,000
Down Payment: \$ 20,000
Monthly Annually
Loan amount: \$180,000 @6% for 30yrs. = -\$1079.19 -\$12,950.28
Taxes: -\$83.33 -\$ 1,000
Insurance -\$ 66.00 -\$ 800.00
Total Expenses: -\$1,228.33 -\$14,739.96

Rental Income +\$ 1200 +\$14,400

Difference -\$28.33 Monthly -\$339.96 per year

In order to lower your monthly loan costs reduce your purchase price.

Your ideal purchase price will allow you to have a monthly positive cash flow which means that your income exceeds your expenses.

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The formula is easy to read and understand. My guess is The formula you have includes the total amount of principle and interest for the 6% 30year fixed loan, right? I don't want to get lost. Secondly...the \$200,000 is the asking price as an example and not the FMV right? I want to learn by asking questions.

Bill G.

P.S. I have something similar that I put on an excel spreadsheet.

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Cash Flows

Thanks for the example.