. * I would go to 50% ARV on Rehabs.Ideal CandidateStrong income, Strong Credit, Strong Financial AssetsHands OffIf you have money as collateral in a Commercial bank......They will work with you.They will loan 80% of appraisalIt would be helpful if the bank would refinance these loans once the repairs are completed.Also, it would be helpful if lease options were structured as Fair Market Rent plus more as an option payment.Example:Market Rent = $1000 pmOffer $950 pm plus $200 pm as option payment (subtracted from future purchase price)Future purchase price can be tied to a future appraisal OR a set figure, whichever is higher.Ideal location of homes for tenant buyers - STRONG EMPLOYERS in the area that are recession proof.Consider not giving an option to purchase, but a Contract for Option to Purchase.

Subtract half for expenses, subtract off what you want for cash flow, then figure the max price from the remaining money.I realize you may be buying this condo to occupy yourself.

OK, here's how I'd do it.Rent: $1900/moExpenses: $950NOI: $950Desired cash flow: $200Max payment: $750Max loan: $112,730 (7%, 30 years)I'd then subtract off the needed work.

I wasn't too good at addition and subtraction (even with a computer program) so I took a chance and hired a part-time bookkeeper.

Then subtract out your debt financing and the balance is your cash flow.Keep in mind this rule is based on making assumptions and averages and should not be used as the final decision to buy or not to buy.

Then, subtract your P&I payment out of the remaining $800 and you get your cash flow.

Subtract from rental income of $13,800 the three types of expense: depreciation ($2,818), interest expense ($9,270), and operating expense ($2,500).

To get the net income, what do I subtract... any cost associated with the rental property, but not including the mortgage?

Recalculate your deal, subtract out your partners' profit and see if it still makes a profit for you personally.Private money lenders can be good friends indeed.

I have read now that you can subtract selling costs (commission, etc.) from the sales amount which doesn't boost my borrowing from my lender to make up the difference.