Compare your profits and subtract it from utilities, PM, and cash reserves.

Cash flow is the amount of money left over after all expenses (Mortgage, Taxes, Insurances, Utilities, Maintenance & CapEx Reserves) have all been subtracted out.  

I thought I would only be able to get 80k for the HELOC because we have to subtract the 100k mortgage out?

You as the investor will make money through a option fee, monthly cash flow and the upside (subtract the option fee from the total upside).Please reach out for further explanations on this.

Possible solution/course of action: I plan to subtract the rehab from the $120k (75%ARV) and call it my offer...and possibly skip the seller financing but looking to see about creative ways to set seller financing up?

The Due to Seller when I sold it was $148,042 and the Due From Buyer when I bought it which was $70,226, and the difference was $77,816, and then subtracted holding costs of $9,711, and get a resulting $68,105.

Have no clue how they do stuff in AR, but standard appraisal:1) Picks 3-5 comparable sales2) Comparable means location, size, type (SFR2 beds), age and condition.3) The appraiser looks at each and either subtracts (like if it's brand new and you're 30 years old) or adds (It doesn't have a garage and you do) to get to an adjusted price compared to your property.4) They then average these out usually by price or $/SqFt.

Once you have an idea of what it might rent for on the short-term market, subtract the $1500 from that and use that to figure out if the extra work is worth it.Mike

Probably true up to 50 units, but I digress.Add up all income, subtract all expenses, and subtract all debt service, if applicable. 

I understand each of these are slightly different (a PM is a monthly expense whereas a vacancy may only happen once in a blue moon), but to conservatively analyze a property, it seems like the safe bet is to subtract 35% of the gross rental income to save for the reserve costs.However, it seems most people analyze their deals ignoring the expenses that are not from PITI, which makes understanding how something "cash flows" puzzling.