If it goes towards the price of the property (your basis) you would have to pay tax on it but it wouldn't be subtracted from you gross income.

If I take your monthly rent numbers and divide in half(50% rule) and then subtract the gas and water ($7,000) I end up with a cap rate of about 11.1%.Good Luck.Bill 

Here are some numbers.Purchase price: 21,500 (had to subtract for the bank paying taxes)Estimated rehab cost: $8,000Monthly Rent: $850-895I was thinking about the flip idea.

I estimate an additional $200 for the 4 rooming units soo all done the minimum rent is $2900 subtracting $300 for maintenance and $2000 utility for the rooming and $200 for anything miscellaneous that might come up .....

Normally this $45K would also be going to Bill, as the closing attorney would enforce... the only way is for Bill to then give you this money BACK AFTER closing (without closing attorney's knowledge).Otherwise - hard money will lend you 60-65% LTV - if ARV is $400K, they would give you $260K, but subtract out rehab first (so, $45K)... you'd have $225K for the closing, have to come up with $50K + your first contractor down payment.I guess this was my first confusing statement - I don't understand where you're getting the rehab money from.

Always determine your own property value "As-is" and "After Repaired".The standard formula is ARV times 70% - Repairs = MAO.MAO is the most you can sell it to a rehabber for. subtract your wholesale fee from the MAO and that is what you can offer the seller.

Correct, I just chose the Total Closing Cost and the subtracted some items that I knew were too high (i.e. home owners insurance misquoted)Please update your "est closing cost" to ONLY include Section A and the appraisal fee from page 2 of your LE.For P#2 & P#3, I was told that going to 4.875 I could subtract ~$1400 origination fee, and if I went to 5.125% I would get a 700 creditI guess I didn't fully understand all the different sections.  

You might consider adding a line saying, "buyer's contribution to repair costs" if you want to have some goodwill with the seller, so that the repair costs aren't ALL s subtracted from your original offer.  

I want to find a good deal a little bit closer to home, in the Tucson area.To calculate estimated annual income, I simply took the Adjusted Gross Income (Gross Income minus the estimated 10% vacancy loss), and subtracted all of my estimated expenses (maintenance, supplies, utilities, taxes, insurance, mortgage payment, property management).Many of my figures are estimates, so I could come out higher or lower, but I have a bit of wiggle room.

Subtract the total cost in gas / electric, that totals to $1143.00 a month profit.