If it turns out to be 50% of gross, or $2150, you're at $860 net (closer to 6% cap), subtract your $1200 mortgage payment and you are suddenly losing $340 a month.

ctrentalguy,Simply subtract your mortgage payment from 1/2 of the gross rents.

Also, you then subtract deprecitation from the basis.

What I mean by that, do you put your offer in at FMV minus cost of repairs and then subtract 30%?

If you subtract these from $200 per unit per month, that leaves $85 per unit per month that would not be correlated with normal operating expenses.

Subtract out your mortgage payment and that is the cash flow you will have a month.

Then we average the price out and automatically subtract 5%, and that becomes our ARV.

I like to budget 15% or more if the house is a wreck for surprises.If we use just basic subtraction then 125000-76000-25000= 24,000.

The multiplication of income by 0.92 is subtracting 8% for my property manager's cut.

So that I can learn the ropes, raise some capital, and network for future investments.Basically I subtract my pathetic social life from 2 months of my time which is equal to 600-1,000 dollar commission plus minimum wage from my overnight job.