One of the advantages of designing your own, is you can adjust, add, change, subtract the way it looks and what it does as you want/need.Joe VilleneuveREcapSystemA2REIC

So, I'm guessing total rent at $9000.From that you subtract actual expense (maint/ins/taxes/PM) of $5000, mortgage interest of $1000 and depreciation.  

As someone said, you should probably subtract off depreciation for the carpets, appliances, etc. if you think you are going to wind up in front of the judge.

Those get subtracted from the net sales price. 

As part of your "return", take what you would normally be paying for rent and subtract your new $200 mortgage payment from that, that is essentially your return.

I look at the houses right around the subject property and if they're all pretty close, I subtract 20k or 50k depending on how high the prices are and use that as a rough estimate.

After you figure that out, then you can take that along with the debt on the property and subtract it from the $157,400.

Therefore, you'll need to subtract the cost of fixing up all the units.  

Here’s what I mean:If you are using a Schedule C in your personal tax returns there are 4 important items to be aware of when a bank calculates your income.Schedule CDepreciation (Line 13/14) – can be added BACK as income Business Use of Home (Line 30) – can be added BACK as incomeVehicle Miles (Line 44A) – can be added BACK as incomeUn-allowed Meals and Entertainment (Line 24B) – is subtracted FROM your incomeSo if your Schedule C taxable income is $0 (line 31) but your depreciation is $10,000 then your actual income is $10,000!

I am haopy with the deal but would like to see what others think as far as risk return.The unit is a 2 bedroom 1 bath, 900 sq ft, 450 sq ft storage space, balcony, in unit washer dryer, outdoor parking, brand new paint and carpet, with appliances that are far from new but good condition.I analyzed the deal using the rental rates others are getting in the complex and subtracting all of the known expenses.