Resist the slick talking scam artists that claim to "have the secret", or "will give you the information that no one wants to share", or "have a proven formula", etc.

Here is the formula for calculating the future value of the rent.Inflation-adjusted rent at:5 years: $1,000 x (1 + 2%)^5 / (1 + 5%)^5 ≈ $8657 years: $1,000 x (1 + 2%)^7 / (1 + 5%)^7 ≈ $81610 years: $1,000 x (1 + 2%)^10 / (1 + 5%)^10 ≈ $748Because inflation is outpacing the rent, every year your buying power declines.

Many people talk about MAO formula but they don't talk about how to calculate the repairs.

So, I always recommend that investors choose a place they can be successful, rather than a random market thousands of miles away that they picked based on some formula.

Wholesalers often:a) bring deals where the rehab costs were not properly calculatedb) ARVs that are unrealisticc) Use formulas such as ARV * 0.80 instead of ARV * 0.70d) Don't provide property information because they don't have a contract in placee) etc 

Cap rate, is a fundamental formula in real estate investing, particularly for evaluating income-producing properties like multifamily units.

I calculated the cost of replacing the roof on my primary residence (just for practice) and ended up getting $21,000 using the formula in the book.

For investment purpose the formula is :(ARVx70%)-estimated repair cost=Maximum purchase target.

Expressed as a %, B.O. shows how much physical vacancy the property can handle to break even, in a worst case scenario.So if the property went down to X% occupancy, the sponsor can still pay all of the expenses and pay the mortgage.The formula:(OpEx + Debt + Fees) / Collected IncomeMost investors would agree anything between 60% and 80% is acceptable.Are you calculating B.O. in your underwriting model?

@Greg Scott thank you for the clarification on the Cap formula, that makes a big difference.