.), utilities, and management once you move out will need to be subtracted.

From this you need to subtract TI (taxes & insurance), vacancy, repairs & maintenance, capex and property management.

You need to split the business from the real estate when underwriting. if you subtract inventory, goodwill, and increase a manager salary to market, your rental return looks a lot better.

Subtract P&I from that and you wind up with say $200 (rough estimate based on your numbers).

Internal ARV at 250,000You go to bank to cash-out-refi250,000 * 80% = 200,000 LTVThat LTV is now subtracted by your old mortgage original amount?

I crunched some numbers, added up the rents for the 3 units of the 4plex, and once i subtracted the estimated mortgage, the Cash flow was about $1,300!!

Newbies will look at the initial projected sale price of $329,000 and subtract the purchase price $214,430 for a total profit of $114,570 (in their mind) a tidy sum to be sure, and think "If I do two of these a year I'm in like flint".

From there, subtract the expenses (they can range from 30-50%, so you'll want to use 40% for this quick evaluation).

You subtract that number from your sales price less closing costs, and you have your capital gains that would be realized on the sale of your primary residence.  

The $9K of net cash rent left over after subtracting expenses and interest is still jingling around in your pocket.Rent: $30K - expenses ($12K) - interest ($9K) = $9K of net income that you pay no taxes on.