Most of my properties are flips that are sold within months, and even my rentals I only expect to hold for 3-5 years max.If I were ever to buy rentals that I expected to hold long-term (more than 5 years), I wouldn't subtract out selling costs -- I would just use market value.

had a meeting with my banker yesterday....just for comparison's sake, my banker takes gross rents and subtracts taxes and and insurance...he takes 60% of what's left and counts that as income...that is super conservative!!

In other words, you add up all costs, subtract the total from your income (the sale price) and that's what you owe taxes on.By contrast, with properties you hold, some things are expensed, some things are depreciated, some things are pro-rated, etc.

When they "submit" the form a calculator will take the low home value and multiply it by 60% and then subtract the high repair value to come up with the "offer".Of course there will be other questions such as contact info, mortgage balance, liens, house specifics, etc.

.$70,000 purchase price$17,500 (25% Down)$5,000 rehab expense$22,500 intial cash outlay$218 * 12 = $2,436 annual cashflow after subtracting HOA of $180$3,850 estimated equity gain via appreciation @ 3.5% (Speculative)$700 of debt payment via principal$6,986 Profit Year 131% Cash-on-cash return Year 1 (This is throwing out closing costs on your mortgage, but you get the idea here.

Is there something I should add or subtract?

This would most certainly be more than 33K if you subtracted the 8K HBC out already, and I'd venture to say its worth more than even the 41K if you did buy it at such a discount.

A)Basic Subtractions: Repairs (estimated) : - $9,000.00 Min Profit (15%) : - $22,500.00-----------------------------------Current Max Purchase Price = $118,500k-OR-B) is it MaxPurchasePrice = ARV-30%-repairs ($96K)--------------Question 3--------------HOW ACCURATE ARE THESE #s below?

Why isn't debt service included in the total of operating expenses then subtracted from rental income.

50% rule says subtract 50% of the rent for expenses, what is left goes towards P&I and profit.