I subtract the yearly rent by  yearly cost and get my yearly cash flow ("CF") (some minor things are left out like taxes, but I consider that to be upside to my analysis). 

If we subtract that from the income we are left with an NOI of roughly $18500 .

That is, I determine what 70% of the after repair value will be, then I subtract repairs from that number, and offer that number.

If the house I was looking at had an ARV of $100,000, I would immediately subtract 20% or $20,000 since I invest a max of 80% ARV.  

Then take the newly evaluated/market price, and subtract the difference between the average List Price and Sales Price.

Angie Menegay and Brian Hoyt,The bank will subtract interest and depreciation and then deduct the current payment to determine actual expenses.

Would I pull the lowest recent comps and then subtract rehab cost.

Then subtract an appropriate amount for depreciation (a reserve that recognizes that parts of the structure wear out and need to be replaces, as well as functional obsolesence occurs over time and updating is neccessary.If you are still in the game after all this, have the seller name a price and terms first.

If you subtract #2 from #1 and you get a negative number, find an agent who works short sales and have that person work the deal with your offer being the one that gets submitted to the lender.Step 4.

Subtract your P&I to get cash flow.Both of my calculations assume you're using a PM.