Typically, the seller wants it done fast and cheap, which often does not equate to the quality you would look for as the owner.But, it is possible he wants to do the work because he has top quality contractors that will do the work well and for less money than you could yourself.  

I will definitely use some of the equations above to look at my situation.Thanks again!

I like to get a minimum of 15% COC return on rentals that I buy (which equates to me finding maybe 2-3 deals per year to consider in my target area). 

@Carlos Lopes mortgage paydown and tax savings are usually mentioned as benefits but rarely factored in the equation for three reasons: 1. they're variable from investor to investor. mortgages are always different (5-30yr terms, different interest rates, fixed/variable rate, interest only / fully amortizing, etc.) and everyone's tax situation is different2. they're hard to calculate because they're "paper" gains.

Is he on the right track, or is there more to the tenant screening equation?

I understand the equation for asking for the price is NOI/cap rate.

I would equate it to managing yourself when you are not set up to manage properties.There is scalability in this...Now to play the Devils advocate if you get autopayments set-up you can always figure out how much interest was paid each year and what your payoff is so just decide how competent you are in that and be honest with yourself, there is nothing wrong in outsourcing parts of your business.

I spoke with an investor yesterday, while I was driving, who asked me to exactly explain the equation for Cap rate.

That is missing from this equation.

Part of the whole equation is what kind of money you're earning from outside RE, and how much time do you have until you want to be able to utilize your rental income?