Here is the deal, we sent out direct mail and got a ton of leads, this is one.House: Duplex 3 bedrooms 1 bathroom downstairs/1 bedroom 1 bathroom upstairs, 2 stall detached garage, owner states not a lot of repairs needed (maybe $2,000 total)Current Rent: $1,225 totalHouse assessed at $96,000Current owner owes $52,000Wholesale offer (from our formula that would make sense for us to buy it wholesale): $53,000 cash - owner declined (too low)If we keep it to rent out do we get a hard or private money loan to purchase for a higher cash offer (we think he would take $70,000) and then take it to the bank after a certain amount of time to get a conventional loan because we will have almost 30% equity in it when we buy it?

The hypothetical square may include steep hills or wetlands, not buildable,  and that area can't be used in the formula for determining total houses.

The basic formula would be 50 lots x $200 lot rent x 12 x .6 (I'm guessing that the property owner pays the water/sewer for the tenants) x 10 = $780,000 at a 10% cap rate.

Most people in that type of business have formulas they use

I can't remember the exact formula, but it is something along the lines of 70% of after rehab value - repair cost.

Antonio Esquivel I need someone to verify my formulas. it pretty much calculates everything automatically and income statement is specific to a realtor.

I live in Bay Area and nothing around here comes even close to suggested buying formulas. 2% 50% etc.

@Ryan Moore if you aren't using tricky things in Excel like pivot tables and some of the more complicated formulas, use LibreOffice.

Its a complicated formula so you have to use the government calculator or have a mlo/rmlo put it in their software.

What hurts Investors that use this formula is it does not account for Holding Costs, Backend Selling Costs, etc.