Your gain is determined by the difference between your adjusted cost basis (acquisition plus cap expenditures minus depreciation) and the net sales price - debt is not a factor.3.

Ensure you include all of the expense calculations when number crunching (property management, vacancies, maintenance, capital expenditures, property taxes, and insurance).

I note that you asked specifically about “cash-flows”, which has multiple components each treated differently for tax purposes.In general, you can start with NOI, next you have debt service and cap ex, which can get you to cash-flows.The interest portion of your debt service is tax deductible (possible subject to limitations) and the principal portion is not because you get basis in the asset for the loan principal, which generates a depreciation deduction.Similarly, cap ex is generally not deductible currently but the expenditure is capitalized and depreciated, similar to the initial basis in the asset.In summary, you have cash and non-cash tax items that cause your taxable income to differ from your cash-flows and taxable income * tax rate determines your tax liability.

*Current numbers*Gross income: $1,380/month or $16,560/yearTaxes: $67/month or $800/year Management: I will be doing this myself with my team, but I am thinking around $250/month or $3,000/yearMaintenance/Capital Expenditures: $250/month or $3,000/yearVacancy: I'm thinking very low since the trailers are not park-owned, but I figure 5% is fairly conservative. $69/month or $828/yearNet Income: $744/month or $8,932/year.The asking price is $75,000 and the seller indicated it was negotiable. 

Income generated by properties is generally shielded through depreciation, providing investors with the long-term benefits of substantial cash flow and very little tax burden.IRS rules allow owners to take annual losses in the form of depreciation to smooth out eventual capital expenditures as buildings age.

Maintenance is a huge expense to keep in mind, Vacancy in case one of your tenants moves out and stops paying, and of course Capital Expenditures to plan for bigger projects in the future such as roofs and siding.

@Trevor Bingham Income - all Expense's including Capital Expenditures (whatever % you choose)  = cash flow....

@Taylor CochranOkay.So, you have to treat this like a buy and hold rental with you also living in one unit.So, you need to calculate the cash flow and the ROI.On the surface, if you're renting part of it for $1,750+ and mortgage would run around $2,500 at 4.5% interest rate.That leaves you with a negative cash flow for the investment before you consider property tax, home insurance, and reserves for maintenance, capital expenditures, vacancies, utilities, and property management.You should check out the Bigger Pockets video on rental property analysis.

We spent about $1500 in December out of our cash flow to finish up some deferred maintenance items found during our initial inspection, so that weighed on our NOI a little bit but shouldn't be an ongoing expenditure. 

The investor (through the Fund) must make capital expenditures of an amount at least equal to the adjusted basis of the underlying property.