As I was poking around at the relationships between jobs and potential predictors of job losses, I started looking at a mathematical representation of something less quantitative, that we are all familiar with.

That's why I never trust website estimates, they just have a mathematical formula that spits out random numbers, it generates almost the same value when you have a 200k interior and 30k interior.

Mathematically challenged?

Specifically:value = rent / 0.01 (estimated via the 1% rule)NOI = 12 * rent * 0.5 (estimated via the 50% rule)cap rate = NOI / value = (12 * rent * 0.5) / (rent / 0.01) = 12 * 0.5 / (1 / 0.01) = 6 * 0.01 = 0.06In other words, combining the 1% rule and the 50% rule is the mathematically the same as assuming a 6% cap rate for residential.

My advise would be to focus on analysing a business thoroughly and not quickly before making an investment decision.Naturally there specifics to different industries which one needs to know to evaluate the quality of a revenue stream; the reasonableness of operating expenses; and whether the debt load being carried is appropriate, but the mathematical callisthenics are the same.Screening a property, or business, to see whether it warrants further examination is a different matter.  

Like I said, I am new, no properties YET, but trying to get a feel for my local market and working on the mathematical formula to start to recognize how the numbers "move" in order to recognize deals.

sometimes its just nice to own a trophy property which basically describes the better areas of SD.of course you can refi till you die and use all those mathematics that of course on paper make sense.but what if U sell it try to buy in a market that gives you a little more return on paper ( which is generally low B to C class) and now your stuck in an asset that's tough to manage and can go without rent fairly often because the tenants are NOT SD tenants .   

Mathematically if you can make a greater return than that 3% then you should pay the minimum on the loans and invest the extra cash, which will enable you to keep the difference between the interest on your investments and the interest on the loans.

I have a certain threshold depending on return but it is not a mathematical formula, just a feeling based on my knowledge and experience, which of cause is constantly changing and hence the "risk factor information" is constantly being reevaluated.How do you account for risk in your evaluation of potential investments?

The answer to this question lies in the mathematics.