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Originally Posted by greyeyes
well, I have come to understand that if you buy through the bank you will be spending significantly more money on the house than if you did owner financing.
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Not exactly. If you buy a house and finance through the bank there is a good chance you will spend significantly more on closing costs than you would if you had seller financing, though some banks do over to pay all closing costs if you keep the loan for a minimum number of years. That said, if you came to someone with cash or a loan from the bank, you would have much more room to negotiate your price. If you came to the owner asking him to finance you, he is in a position to demand a higher price than he might otherwise be able to get for the property.
When you're working the numbers to figure out what you can afford to buy and rent to cover your expenses, you also need to figure in taxes, insurance, a percentage for vacancy/rent loss, reserves for maintenance on the property, etc. Finding an investment property that generates a positive cash flow isn't as easy as it used to be. Real estate is great to invest in, but make sure you don't take too much of an optimistic view of the property.