If you subtract $161 million in deposits from $173 million in assets you get roughly $12 million.

Under older rules, the bank would take the rent, subtract 25% for expenses and compare that to the PITI payment.

All my calculations assume zero fixup costs, so you should subtract those off.

The reason that we don't subtract the downpayment from the purchase price is that there is a cost to the downpayment.

Subtract off the fixup, and that's what you can pay to get a $45K (if things go well) to $30K (more realistically) profit.

Jon Holdman's post on the 2% rule, responding to your Dec-07 post would suggest an after repair (ARV) price of $150k ($3k rents / .02), and subtracting for $25k in repairs, that puts the purchase price south of $125k.

So, an easy formula is to take the rent, divided by two, then subtract $100.

Jeff That's why I've always been a fan of not only "qualifying" the buyers but while I'm adding to the list I also subtract the tire kickers from the list as well.

Owning a home, whether a rental or a residence has a "forced saving" component.However, if you add up all the payments on a residence, add in whatever you've paid in maintenance and improvements, subtract out the loan payoff (if any), and compare it to what you can get from a sale its almost certainly going to cost you money.

Subtract $100 and you get $400 as the max payment.