Essentially is as follows:New Lease Fee (one month’s rent) + Expected Missed Rent + “Refresh” Cash(Refresh Cash = the amount out of pocket to prepare the property for new tenants, after tenant deposit is spent)It looks like this:(A/B)+(A*C / B)+(D/B)Where:A = New lease fee (1 month's rent) ($1,000)B = # of Months in lease (24)C = Expected # of months vacant in-between tenants (1.5)D = “Refresh” Cash ($500)In this example:($1,000/24) + ($1,000 * 1.5 / 24) + ($500/24)Which is:41.67 + 62.5 + 21 = $125    which is 13% of monthly rent in this scenarioThe equation allows me to make a judgement call in many different scenarios.

Once you factor those into the equation, cash flow isn't as important as you probably thought it was.

Overall it was a win for everyone except for the agent we had planned to use (fortunately I was not under contract... yet).I found the major and obvious things were pretty easy to estimate, it was all the little, easy to overlook type stuff that crept into the equation.

(A) need to accumulate more capital/equity somehow or(B) need to lower your monthly nut or(C) take on more risk to achieve higher returnsThe actual numbers vary widely based on market, types of leverage used, and how you operate... but the equation stays the same.

Offended shouldn't be part of the equation especially for a buyer.I would say that some people have  looked at enough houses to know and make a choice so the wife not seeing would not worry me as much, she could be out of town. 

I have not seen a $10,000 repair on $30,000 purchase end up being a success, unless  you are seeking high risk and high reward, I think you need to take high reward out of the equation, because you will find yourself exhausting money to replace tenants and complete on going maintenance.  

If you want the quick formula for your SFR:PGI (potential gross income)-VCL (vacancy and credit losses)+OI (other income--laundromat, cable etc)=EGI (effective gross income)-OE (operating expenses)=NOI (net operating income)If you get financing, you do not factor that into this equation.

Cash flow is great, but just one part of the overall equation in the deal when bringing a lender into the deal. 

@Michael Dunn, it is income and eventually yes a lender will factor that into their DTI equation for you.

The reason this should not be equated with cats is because of this:Why are cats banned in places?