My guess is they came up with the square feet by multiplying 64' x about 42'.1.

If the bank is going to provide the means to acquire, reposition or refinance for more cashflow, then why are you parking equity in an asset that isn't going to provide you a multiplier effect on income.

Now multiply that by hundreds.

So if your primary home is worth $700,000 we would multiply that by 80% = $560,000. 

You take the After Repair Value or ARV and multiply by .7 or 70%.

Take the advertised selling price and multiply that by the cap rate. 

Let X be the percent multiplier (typically 70% for MAO).  

                                                    $260.00 Management                                              $520.00Insurance                                               $111.00 Property Taxes                                           $354.00Mortgage Payment                                     $1,517.96Total                                                         $4,072.96Monthly Cash Flow:                                  $1,127.04Cash on Cash ROI:                                    24.18%Financial Projections:Total Initial Equity:                                     -$ 351,000.00Gross Rent Multiplier:                                 6.25Income-Expense Ratio (2% Rule):                 1.28%Typical Cap Rate:                                        8.14% Debt Coverage Ratio:                                  1.74ARV based on Cap Rate:                              $ 390,000.0050% Rule Cash Flow Estimates:Total Monthly Income:                                $ 5,200.00x50% for Expenses:                                     $ 2,600.00Monthly Payment/Interest Payment:           $ 1,517.96Total Monthly Cash Flow using 50% Rule:    $ 1,082.04

I know there are several different metrics I need to consider before buying such as Debt Service Multiplier, Monthly Cash Flow, ROI etc. but I would like to still by a relatively cheap property for my first investment.

Cap Rate: NOI divided by sales priceGRM (Gross Rent Multiplier): sales price divided by SGINOI (Net Operating Income): SGI minus vacancy & expensesDCR (Debt Coverage Ratio): NOI divided by debt serviceDepreciation: sales price x 85%, divided by 27.5REO (Return On Equity): Cash Flow divided by equityROI (Return On Investment): Cash Flow divided by down paymentSGI (Schedule Gross Income): income before vacancy & expensesVacancy (depends on market): 5% of SGICash Flow: NOI divided by Cap RateGOI (Gross Operating Income): SGI minus vacancyValue: NOI divided by Cap RateValue: SGI x GRMExpenses: 35% of GOIMax Debt: NOI divided by Debt Coverage Ratio