Most properties that hit the MLS do not offer the type of margin that wholesalers are looking for.

I just don't want to deal with the hassle for marginal gain.

Having a 20 k profit margin is also a good buffer for the u expected.

And so on, until the margin is compressed. 

I ran this report by some REI at a local meetup in Riverside a few weeks ago and for a 5% margin it was not worth it.

Unless your pricing stuff down to move fast and thereby thin thin margins.

Can someone help me with understanding how to calculate what makes a good profit margin (I.e 1 percent to 5 or more) when looking at the property price to rental income.

Margins have shrunk though. 

Unexpected things always come up so the thinner the margins the less room investors have for speed bumps along the way. 

There are two ways to do it.If you are looking to buy as a primary residence, you base the value on the comps with any adjustments for condition and amenities.If you are buying to flip, you use the flip formula: ARV - profit margin - rehab costs - closing costs - finance carrying costs = maximum possible offer.If a seller is holding out for price, a low offer without contingencies doesn't mean very much to them.