Put that payment in your mortgage calculator to get the max purchase price and then subtract rehab costs, closing costs etc.EASY!

In other words, subtract the mortgage payment ( P & I) from 1/2 (50%) of the gross rents.

If I add in closing costs (2% of the sales price) and subtract the down payment, I get a monthly payment of $857.

take gross rents, subtract 50%, does the deal still look good?

The lien would be subtracted from the sellers bottom line at closing.

So for my understanding a good way to judge it is to take the property and based off of local rents for that area get the average % of rent to value, subtract repairs and there is your comp value.  

I'm looking to purchase a foreclosure as my primary residence as it has a studio apartment over the garage that I should be able to get $1500 a month from while renting my current home for $2000 a month, which would result in a net income of $1185 a month (subtracting the mortgage on my current home).  

For instance on a 240k home 65 % puts you at 156k before you subtract the cost of repairs....

If it's out of the norm, I know to research further by actually opening up the email and looking at the listing.Once you have ARV - and I would suggest you always lean to the conservative side of that number - you then can take 70% of that for holding and costs and subtract out your estimated repair value and your fee to get what you - as a wholesaler - would attempt to get the property under contract for.

@Zach Shuler - the "50% rule" is to take the monthly income, subtract 50% to estimate expenses, then subtract your monthly mortgage payment.