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. 

You do not subtract out any expenses from the rent when calculating this.

To be completely honest, when people tell me their Credit Karma score, I usually subtract 45-50 and that comes out to be a decent estimate of their score.

Just ask your buyer what the highest percentage is before not considering a property a deal.3) Take the reduced answer, subtract your rehab approximation.4) Subtract your expected wholesaling fee.5) Subtract 3% for closing costs.The answer ordinarily would be your maximum allowable offering to the seller, but because an agent is involved (and need to be compensated, along with your fee, in addition to closing costs)...you will need to negotiate well to produce something that can be called a deal if the current ‘Sold’ comps are not tens of thousands above your closing price.The more ‘tens of thousands’ above the total closing costs the better for a deal. 6) Because your agent will be using a standard contract, you will be asked about a closing date....you can just ask your buyer how fast a closing can occur if needed (before speaking with the agent to complete the purchase agreement.)7) You will be asked how much of a down payment you want to offer in the agreement.

Hey All, when qualifying for a loan, with using a rental property as income for example, You use rents received and subtract all the expenses, but you ADD BACK Mortgage interest, taxes, Insurance and depreciation.

You have to subtract out the construction costs also.Find people who are potentially in some sort of distress.

Cash flow is there, even after factoring in the 50% rule, cash-on-cash is above 20% ..not 25% or 30%, but still reasonable as compared to my 401k :)Thanks,BryanThis is for a SFR, 3.2.2AssumptionsARV $82,000.00 Purchase Price $53,000.00 HML Interest14%CL Interest4%Hard Money LoanClosing Costs $4,000.00 Rehab $10,000.00 Required Investment $67,000.00 HM Loan Amount 70% ARV $57,400.00 Initial Cash Investment $9,600.00 Refinance LoanHML Int Only14% $669.67 HML Payments (no. of mos of rehab)3$2,009.00 Adds to total cash investment, as interest payments must be covered out of pocketPayoff Amount$55,391.00 Closing Costs $4,000.00 $59,391.00 Conventional Loan 75% FMV $61,500.00 Cash Investment $(2,109.00) Subtracts from total cash investmentRent - 2% rule $1,060.00 $1,000.00 Monthly P&I4% $264.45 Operating Costs - 50% rule $530.00 $550.00 Monthly Costs $814.45 Cash Flow $185.55 Equity $20,500.00 Total OOP (includes HML payments) $9,500.00 Cash on cash 23%

The bold figures above is all you need to apply this rule of thumb to:Estimated Gross Operating Income (Rent/Month): $1,200.00Now take 1,200 and multiply it by 50% (0.5) which will yield you 600.1,200*(0.5)= 600 This will factor all of your expenses tied into the property such as management, vacancy, depreciation, taxes, insurance (as noted above with my calculator).Next you will take 600 and subtract debt service, which is your monthly payments towards your loan:Mortgage Payment (Month): $454.49600-454.49= 145.51 Cash flow/monthThis last figure is the conservative figure you will collect after everything is all said and done, which is your cash flow.

I then subtract out my fixed costs (which includes the concessions you're referring to) separately in the analysis.

Subtract that.