Simple, ALL IN, divided by NET income.

All told, your expenses are $1,333 per month and your rent income is $1,500 a month for a total earnings of $167 per month.If you divide your annual earnings by the amount of money invested, you'll see it's a 4% return.

you want to do 30% down on the purchase , add the construction budget and divide by .65 to be at a 65% arv .

Your rent avoidance is $100/month, $1,200/year, and $6,000 over 5 years.Taking these four factors into account let’s calculate your net worth ROI for house hacking.Your net worth ROI calculation over 5 years would look something like this:Appreciation: $108,280Loan Paydown: $31,807Tax Benefits: $0 (b/c you aren’t cash flowing)Rent Avoidance: $6,000Total Net Worth Increase: $146,087To calculate your net worth ROI over 5 years, you would divide your total net worth increase by your initial investment (your down payment of 5% or $25,000). $146,087/$25,000=584% This is an incredible return on investment.

Your “overhead” costs to buy & sell the house + holding costs, interest, property taxes etc, luckily these can be pretty easily calculated, many websites like closing companies will have websites where you can fill out information about a property and it will tell you the costs to buy & sell, loan costs are easily calculable, take your purchase multiply by intrest rate divide by 12, that’s your monthly expenses multiply by the number of months you project the to complete, a good rule of thumb is even cosmetic can easily be 6 months anything more complicated can be 9-12 though all that can very greatly.3.

I do believe there is merit in following simple best practices that have asset protection as a side benefit:  1) Taking out large mortgages on properties to minimize equity; 2) Having adequate liability insurance; 3) Contributing assets to retirement plans and other protected vehicles; 4) Dividing ownership of family assets between yourself, your spouse, and your children; and, especially, 5) Running an honest business and treating people fairly.  

Would our gross income with add backs be divided by our ratio in LLC that owns the retail building to cash out on?

If you take doubling money and divide it by 36 months then if we exited in 3 or 6 months time on our value add we try to hit what that would have been had we held for 3 years.

That said you could easily work out the cap rate of the purchase by taking the net income you receive from the farming operation and dividing that by the purchase price. 

As an REI/landlord to another these types of actions & behaviors is what creates a divide and that's something we need to avoid.