Long time MMM reader, saver, investor.

New to Real Estate investing. Looking to purchase a rental in CA where i live and work.

5 plex- 10beds 5 baths- **5 units all, 2bed 1 bath**. In a high rental, working class, poor neighborhood.

Asking price **379,000 **...been on the market for over 100 days. Price probably negotiable? Im thinking 325,000-350,000 range

**Rent $3650 ** 3 units 700x3= **2100 **2 units 775x2=**1550**

I did two versions of buying this property. One at the asking price 379,000 and one at 350,000

Version A -379,000

Mortgage 30yr fixed 4 % - 1448

property taxes- 479

Insurance- 100

Total 2027

2027- 3650= **1623 **monthly income 1623 divided by 2=811 (50 percent rule) 811x12months= 9,732$

9732 divided by 75,000 down payment = **12.9 **cash on cash return

I know at 379,000 it falls slightly under the 1 percent rule= 3,790

Actual rent 3650

**Version B 350,000**

Mortgage 30yr fixed 4 percent 1337

property tax 479

Insurance 100

Total 1916

1916- 3650= **1734** monthly income 1734 divided by 2= 867 (50 percent rule)

867x12= 10,404$

10,404 divided by 70,000 down payment = **14.8 **percent cash on cash return

(1 percent rule) 350,000= 3500

Actual rent income= **3650 **meets 1 percent rule.

Seems like this property has potential. Am I missing something or is my math off?