Then I would use that lot to build 4 homes as this business undertaking and hope to have the cost of lots be part of my investment, meaning when one day I sell those new homes, I will subtract lots and cost of building from my sales, so to reduce my eventual tax on the profits.

For example, 100k house you need to buy for 70k all in, which means that you need to get that house for 70k - Rehab cost (get to know a good contract with a middle of the road price point so that you are not telling people you can do a whole house for 5 grand) and then subtract the fee that you want to make on the house and that should be the target.

Can I just take the comps close to the sq ft. with same bath & beds and than subtract my sq ft?

Can I just take the comps close to the sq ft. with same bath & beds and than subtract my sq ft?

First, I am totally new on this ...The only part that I disagree with your calculation is about the "subtracted 20K purchase and sale fee" - as these are being covered by your added cash of 28K, not in addition to the 28K.Thoughts?

Figure another $1000 if cash, significantly more if a loan.Subtract the $25,000 rehab.Then subtract the $160k purchase.Looks like $21,000 or so in profit.

From that subtract your Rehab estimate, Closing costs, and Holding costs to determine your MAO (Maximum Allowable Offer).  2.  

The equation is as follows, COCR = Net Income / Initial Investment The net income here takes the NOI and subtracts the debt service payments from the loan.

I look at a house est how much it will sell for done ,  Subtract  how much it will cost to get ready to sell .

I am not a tax advisor but for simplicity I would really try to use the same number every year unless the number is wrong...like the value of the lot was not subtracted.