It is important to analyze a lot of deals, and if you get bogged down with expense details you will miss many.Just subtract 50% national avg of expenses, from your gross rent (confirm the rent in the market), subtract debt service, and you have a good idea of cash flow.

Then, you should subtract off the deposit.

Then start with $350,000 and subtract repair costs.

.- You only subtracted 6% for seller costs.

KB,To calculate the cash flow in the real world, subtract the mortgage payment (P & I only) from 1/2 of the monthly gross rent.As an example, if the rent was $600 per month and your mortgage payment is $400 per month, here's how that calculation would look:Gross rent: $600Operating expenses: $300NOI (1/2 of the gross rent): $300Less Mortgage Payment: $400Equals Cash Flow: -$100 OUCH!

After subtracting out the commissions that go to my wife (my agent) on both the buy and sell side, my fixed costs actually come in around $13,500.Here is a breakdown:http://www.123flip.com/education/calculating-fixed-costsAs for my magic profit number (on my typical deal), I won't do a deal unless I'm nearly certainly I'll make $15K, with $20K the target.

Sarah,Here is how I see this deal:Gross rents: $1,500Operating Expenses: $750NOI: $750Less Desired Cash Flow of $100 per month = max debt payment of $650 Maximum offer (30 yr, 7% NOO, 650 pmt) = $97,700 less rehab $15,000 = $82,700Then, if you're planning to flip this, you need to subtract your profit.Good Luck,Mike

If there is rehab needed, you need to subtract that off the price.

Subtract any initial rehab from the $30,000 and you'll have the maximum purchase price.As I've said, the 2% Rule is a screening tool.

The actual sales price includes the downpayment which is subtracted to get to the sales amount being financed.