Value with the $1500 rent then subtract the $5500 lost rent.  

When you subtract taxes and insurance your return is probably less than 10% annual.

I first determine what the rental range is (for hold) or sales price is (for flip) than I see the property to determine the expense to get it to where I want it to be- (get a GC or contractor to estimate) then I take the sales price subtract my profit and expenses and that number is the highest I will pay for the property. #2 answer- get comps and determine the sales mediem sales price and be under it#1 answer - get qualified subs to bid the job

Take your gross expected rent, subtract the utilities you're paying and divide it in half and that should cover your expenses.

. ($35k*.15%= $5,250) (So $35k + $5,250 = New Est repairs of $40,250) And subtract 6% to your Estimated ARV.

On the other hand, you will have to subtract out the portion you are living in because it cannot be depreciated...it is considered your personal residence.

Some of their assumptions and math were a little screwy (for instance, they subtracted my HOA, taxes and other expenses on the property TWICE, giving me a net loss on the property).But their rejection also seems to be based in part on the fact that I told them I wanted to use the $100k as a down payment on a $350k home.

These costs vary greatly for each buyer, but our experience shows that a Buy/Sell/Hold cost of 15% of ARV (0.15 times the ARV) is a safe number to use.If you wholesale the property, you may never purchase the property.In this event, all of these costs are passed on to your Investor Buyer.Therefore, you can subtract your additional B/S/H costs from the MAO formula.

The seller loses too much.What if you offered to JV with the seller, bring in $50K of work, $20K profit, $70K in the deal.Do the work, resell the house with an agent for $485,000, subtract the $70K, subtract sales costs.Protect your $70K with a note - mortgage or note Deed of Trust.Not all the time this works, but if you have a gorgeous house, you JV with the seller, you secure the debt and your profit upfront, you don't have to convey title, no purchase closing costs, no carrying costs, and you get your $70K when it sells.You might need to check with an attorney to protect your JV interests.But isnt that better than wholesaling?

You subtract all your costs from the revenue to get to taxable income.As a self employeed business, you're responsible for both halves of the SSI and medicare.