But then payment on a 20 year, 8% loan is $3187/month, or 662 in the hole.If I wanted to get $700/month in cash flow, I'd subtract that $700 from the $2625 NOI to get $1925.

So I checked out the income for the previous 3 years, subtracted their 45% and then simply deducted my carrying costs from the remainder and it was a number I was happy with.

If you want an assignment fee, you'll need to subtract that off, too.A lease option is going to have an option to purchase.

I am fairly new but what i have so far in my learning is that u can pretty much find comps anywhere but that doesn't mean there actuate, and as far as estimating in some book and programs they tell u to pick a number, for example what i have learned is that depending apon the shape of the house going from ugly to real ugly to junk 10,000, 20,000, to 25000 and also depending apon the size needing to be in the area of 1000 to 2000 square feet then to take these unreliable number in to this formula ARVx70%-repairs = MAO and back off slightly for profit now like i said i am new so ,but i do know this is complelely dumb for me use do gurus bring your answers and add your knowledge or subtract from this and tell us newbies how to correctly run the numbers and come up with offer that guarantees u money even if u have to flip the deal over to and end user of course that is if it sales lol...

Subtract desired cash flow, say $100.

And, you subtract off any work you need to do.

In addition, since this unit has owner payed utilities, the expenses could very well be above 50% of gross rents.When I analize these deals (quick analysis), i take the max. gross rent, subtract out the "current vacancy" arriving at the adkusted gross income.

For rentals, consider expenses = 40-50% of rent, subtract off the P&I payment, and leave yourself a profit.

Subtract off the closing costs (about 8%).

. * 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.