ACTION, ACTION, ACTION!!!! This is my secret weapon.(shhhh)..You must take action for anything to happen...It can't be done thinking about it, wishing for it or just doing nothing. Yes, I made mistakes along the w...

Its not much better, but am I using the right formula?

My formula is PITI cant exceed 40% for buy and hold.

This is the best, most common indicator of value.2) Income approach: The income the property will generate yearly multiplied by a formula for what things sell for in your area.3) What it would cost to build it and what the value of the land is.

The funny thing with this "rule" is that so many people want to "break" it or ignore it and come up with a number that fits their formula for profit.Do with it what you will, but it has been put forward by many sources who aggregate across a number of doors, that, over the life of a rental your costs will be around 50%, there are things a person can do to bring it down (self manage, maintaining and repairing the property yourself etc).It's not a case of someone buying a property and people jumping up and down about "the 50% rule has been broken".

Is there a formula you would recommend?

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The law allows for any formula, but typically the amount of equity would be what you want to go with.

[ARV - rehab] * 70% = Maximum Allowable Offer (MAO)MAO - fixed costs (purchase & sale costs) - holding costs (utilities, ins, financing, etc) = (potential) Net ProfitNet Profit / Total Investment = ROI %That's the formula I use for a Wholesale (would also need to include your wholesale fee in the Net Profit calc) or Fix & Flip deal. 

It has been very frustrating dealing with the bank on this because they are basing their list price on a formula off of the mortgage amount.