Then all you do is subtract out the repair costs and that is your max offer (with room to go up a few thousand if need be.)If it is turnkey, locate a buyer at $175k, double close it using transactional funding (I can provide if you wish) and your offer can be as high as $150k and you would still net around $20k with no money out of pocket.

If we get an appraisal and he comes back at 135K, I think it makes sense because we could subtract the realtor costs from our buying price since she won't have to list.

After you subtract all of your costs to buy and hold, and make any improvements, is the cash flow worth it?  

Use 50% of income as your expenses, then subtract mortgage payment to determine the Cash Flow.

When people discuss Cap Rates, I think it subtracts off for all cash expenses EXCEPT Capex.  

I gave him over 20K profit because I subtract it from the arv before I minus the rehab and my fee on that property and he still want more.

Take your estimated ARV, subtract purchase price, fixed costs (buyer closing costs and points, holding costs, seller closing costs, real estate agent commissions), rehab costs, and desired profit.

Logan Turner In my business I use a 3 option offer 1) divide up their asking price into equally pmts (I say this to the seller not so much seller financing)2) seller financing w/ballon due in 15 years3) All cash closing in 5 business days **Now, pending on the motivation of the seller and their true bottom line price a cash deal might be good: ARV: 130k (less say)Repairs: 15kAs is value of: 115kQuick 60% off: 69k MAOIf selling as a wholesale deal: subtract a modest 5k fee will be 64k net to seller **other option the subject 2 w/ equity note due in 5-10 years or when every u sell**and finally divide up the asking price: the local rents must be a higher than the mgt pmts so you can not only pay the new note but cashflow as well...all my deals like this I need at least 200 net...but maybe you might want to make less than that and that's great...but try hard to a least cashflow somethingIf want me to explain in much detail PM

Then I'd subtract my current rent and have the difference auto deposited into my savings account.

Cap rate is NOI/purchase price and the N stands for Net so you need to subtract out all non debt service expenses (ie taxes, insurance, maintenance, vacancy, property management) and what is left over is your NOI.