When you purchase a rental it is easy to calculate because you generally just take purchase price and subtract land value as identified on property taxes.

I typically subtract 3%, of the ARV.Realtor Fees: What is the commission you are willing to pay your listing agent (unless you are the listing agent) and the buyer's agent.

I think that I should be subtracting the estimated Cap Ex from the purchase price.

In Arlan's example the 65% was calculated after subtracting out the repairs.

Then I subtract half of the gross monthly, per the 50% rule, to see what is left to cover the mortgage. 

.  ($60k NOI / .08 CAP = $750k) Of course there are almost always some expenses that need to be included in the analysis even on NNN properties, but that's easy enough to subtract before NOI.  

Subtract 50% off the scheduled rent to get NOI.

After you arrive at your eventual sale price, subtract your rehab costs, carrying & quiet costs, and desired profit.

Do I subtract the difference of the Reduced price vs.

Add, keep, subtract?