The Fannie Mae calculation of your rental cashflow will be based in part on your tax returns, with things subtracted out and added back to arrive at your actual net cashflow.If you are buying a primary residence, the 2.5x thing continues to apply, with the new property's PITI being your new personal housing expense. 

So price per SqFt of a new construction will be Repair costs then using properties ARV I would have to subtract so it makes sense the investment and the difference would be the offer for the land isn't it? 

Subtract mortgage (~$ 550 w/ tax and insurance lumped into mortgage payment) and I'll pay trash ($40) and it should cash flow roughly $600-700/ month with a couple grand ~$3K, needed to get it into nice rental shape!

@Riley A HolzmeyerThis is how I calculate potential rentals: Loan( principle + interest + pmi + taxes + property insurance) Then add your expenses:Vacancy rate 5% of the rentMaintenance Capital expenditures Repairs Property management( add this even if you plan on self managing) Add all that up and subtract it from the rent and you will have your cash flow.

I am an engineer so I use a detailed spreadsheet.I add up all my costs and these are many and subtract that from my estimated income.I look at similar properties and see what rates they are getting and how often they are booked.Excel does the math for you once you have all the numbers.Remember for a VRBO you have to pay for the utilities (don't forget cable or satellite TV and internet), consumables and furnish the place.

The typical pricing is roughly:Pre-HUD (1976 and older) around $1,0001977 to 1979 around $3,0001980 to 1990 around $5,0001991 to 2000 around $10,0002001 to 2010 around $15,0002011 to current around $20,000Those prices are based on being fully renovated and ready to go with solid stairs and skirting.Any renovations you do would need to be subtracted from these retail prices.Note that this is extremely general -- in California a $10,000 home might sell for $150,000 and in Florida a $5,000 home might sell for $50,000.

I would then give that person 10% more than what they paid, so 1320, which means I have to subtract it from my yearly cash flow of 7200, giving me only 5880.

Section 8 as I understand it has a utility allowance they subtract from the Fair market  rent allowance if utilities are seperate.

Do I just subtract whatever P&I I pay off while living in the home for the first two years when I run the buy and hold calculator?

You come up with your ARV, subtract out your costs, subtract your profit, and that is your purchase price.