@Chris -  with rent at $1750 per month and about $1500 in attorneys fees once we subtract the $1600 security deposit we will be into this for about $5500 if there are no damages.

With the remaining amount- subtract the combination of PITI.

Assets-Liabilities, then subtract  the depreciation that the IRS will recapture on you if you sell.    

Then you can subtract any damages out of that amount.  

When you’re getting started, you may think you calculate cash flow by subtracting your mortgage payment from your rental income.

One last thought, I remember when I purchase the properties, the appraiser subtracted a value of 15k for not having an unfinished basement since all of the other homes in the area had a basement/partial basement.   

Of course you paid yourself the principal, in theory so if we subtract that you would get $839,344.26 as the return on the investment, plus you would have the $411,135 principal in your pocket too.The bottom line is that paying down the principal reduces the amount of interest you are paying over the life of the investment, so it also helps increase the return at the end.  

Then you start subtracting.

Since that is the amount the seller will save by selling to you, it is very reasonable to ask him/her to subtract that whole amount from the sale price.

@Ramal Jenkins The title company will subtract from the purchase price to pay off all liens such as mortgages and taxes.