(subtract number for each item as you go down)ARVRehabAcquisition fees (escrow/title)Holding Fees (utilities, taxes, Ins, HOA)$400 Home Warranty (total waste of $400)Sales Costs (Commissions)Buyer's Closing Credits (Typically $5K in CA)Seller's Closing Costs (My Flipper)Wholesale Fee (My paycheck)Offer price-----------------The amount left is what your buyer will make as profit.

If you subtract repairs of $40,000 your purchase price should be no more than $257,000 if you pay more than that, only a stupid investor will give you a dime more than $257K.

Subtract these expenses from the rent you collect every month and the difference is your cash flow.

Here's where things get interesting.. and creative.The initial price was listed at 35,000,000 KRW (remember: subtract 3 zeros for approximate dollar conversion) - it was a 'quick sale', meaning the owner wanted to find a buyer fast.

Just subtracting P.I.T.I. doesn't constitute all expenses. 

Just to add to what Ned said, many rehabbers will use the formula ARV x 65% - repairs as their max offer as well, which means that as a wholesaler, you'll need to subtract out your fee from the purchase price as well.So, your offer might be:ARV x 65% - repairs - wholesaling fee = MAOWhen you sell, you can sell for ARV x 65% - repairs (which makes the rehabber happy) and you make your wholesaling fee (which makes you happy).

You should be able to roughly calculate that merely by subtracting the mortgage payment from $4500.Second, I am assuming you do not have a problem making the current payments on the $20K you owe.Third, that you have the discipline to put those payments into savings (or investments) if you pay off the loans (ie just make the payments to yourself)Fourth, that the interest on the $20K is double digit.Assuming the above are correct, or mostly correct, I would probably sell the rental come early spring, spending a little time and money on sprucing up the property before selling.

Some are requiring you to have money in the deal.If you're wholesaling, you would need to subtract your fee out of the price, too.

Remember buying and selling costs, holding costs, and anything else that you are not expecting in your repair line item.Some investors expect a minimum profit so they subtract that as another costs.

Brian C this approach of subtracting out repairs is not exactly how the Multifamily family market works.