Sounds like the equivalent of buying a contract at Home Depot - which can also be done and used.All that said, a Buyer and Seller could write a contract on a napkin and use if they wanted to.  

Would writing it down on a napkin satisfy the identification? 

Napkin math here, but you should look at 10% vacancy, taxes, maintenance etc.

Those numbers are napkin math, so please, please check stuff out before you buy.

I think one of the takeaways from this show, for me, is how expenses scale in such a way that some of these folks in the midwest can easily afford rent, but not basic stuff to live a basic, functional, sanitary life.For example, if rent is $400 it makes sense that a $20 sheet might be considered "expensive" because that's a whopping 5% of what they spend in rent each month!

We met up at a Starbucks, and he drew on a napkin his understanding of how the "flipping a contract" process worked.

You can keep in any way you want it, paper and pencil, excel, on a napkin or an accounting software.Saying that where do we get started?

(A) A landlord who is a party to a rental agreement shall do all of the following:(1) Comply with the requirements of all applicable building, housing, health, and safety codes that materially affect health and safety;(2) Make all repairs and do whatever is reasonably necessary to put and keep the premises in a fit and habitable condition;(3) Keep all common areas of the premises in a safe and sanitary condition;(4) Maintain in good and safe working order and condition all electrical, plumbing, sanitary, heating, ventilating, and air conditioning fixtures and appliances, and elevators, supplied or required to be supplied by the landlord;(5) When the landlord is a party to any rental agreements that cover four or more dwelling units in the same structure, provide and maintain appropriate receptacles for the removal of ashes, garbage, rubbish, and other waste incidental to the occupancy of a dwelling unit, and arrange for their removal;(6) Supply running water, reasonable amounts of hot water, and reasonable heat at all times, except where the building that includes the dwelling unit is not required by law to be equipped for that purpose, or the dwelling unit is so constructed that heat or hot water is generated by an installation within the exclusive control of the tenant and supplied by a direct public utility connection;(7) Not abuse the right of access conferred by division (B) of section 5321.05 of the Revised Code;(8) Except in the case of emergency or if it is impracticable to do so, give the tenant reasonable notice of the landlord's intent to enter and enter only at reasonable times.

If true, for a back of the napkin calculation, you will need to know the following things to determine your cash flow:1. monthly mortgage payment2. monthly cost of property insurance3. monthly cost of property taxes4. monthly rent that you can get from the property.You'll add up steps 1-3 and subtract from step 4.

For back of the napkin math, I would budget close to $250/SF and at then end of the day try to back into a number where you are making approximately 20% net margin after selling and financing costs.