Next figure out what your monthly payments for principal ind interest are and subtract that from half the rent.

Here are the numbers:Asking 160k, but I plan to offer much lessUnits are 2/1’s, rent for $595 eachBuilt 1984Tenants pay utilitiesIncome: $595 x 4 = $2380 / month or $28,560 / yearExpenses (per month): Insurance: $166 (no idea really, just guessing)Taxes: $238 per DCADVacancy: $238 (10%)Management: $238 (10%)Misc repairs/Long term capital expenses: $300^ I just took 50% gross rents and subtracted all other expensesNOI: $1200/month = $14,400/yearSo offering $144k would put me at a 10 cap.Now the financing.

Calculate your monthly cash flow by subtracting expenses (including mortgage payment if assumable, property management, insurance, taxes, repairs, and any other applicable costs) from the expected rent.4. 

So you will need to subtract the utility allowances (also should be on site) from FMR to determine the rent they will approve.

The constant drumbeat of payoffs will result in you spending a lot of time on paperwork to originate loans and facilitate releases, plus servicing costs (subtract that from your return too!)

I take ARV and multiply by .65 then subtract my rehab costs.

If your making a offer on a flip I would just subtract if from you offer price.

On the other hand, you should be subtracting an allowance for vacancy and credit loss from the gross income.

or do you figure out the ARV and then subtract what is owed?

After that, subtract your expected renovation costs.