Basically, all expenses (excluding PI) to 50% of Rents, then subtract off the P&I, to get estimated net profit.

@Pavel Ushakov  Not really Minneapolis I suppose but if I' ve got everything straight right now in seattle you CAN look at: Credit report Credit scorePrior rental historyCivil history (evictions or other housing related judgements)Employer reference (unless income is from a non-employer legal source, e.g. social security,  alimony)Income to rent ratio (must subtract any voucher income from rent when calculating it)History of commiting a sex crime as an adult (must have "business justification" if using this to deny)You CANNOT look at any criminal history except aboveYou CANNOT consider any credit or civil history more than 7 years oldYou cannot consider source of income  (any legal, verifiable source must be accepted, including short term vouchers)You CANNOT require up front payment of security deposit and last month's rent  (must offer six month payment plan if applicant requests it unless total of fees is less than 25% of one months rent)The "First in time" ordinance that Seattle passed was struck down by a judge,  and is currently on appeal to the state supreme court.  

I then start subtracting Rehab estimate ($15K), Closing Costs ($5K) and Holding Costs ($6K, this is my estimate) to determine my Maximum Allowable Offer (MAO). 

So subtract all the taxes and her situation is only slightly better.  

If they are adamant about the cousin staying and you want this property then take the agreed purchase price and subtract six months of fair market rent from the sell price.

He then said "ok well I'll just subtract $200 from the bill."

Assuming all those costs are correct (sell closing costs look low to me by about $20K), your sales proceeds after paying off the loan would be $95K:Sales price $400Kless sell closing costs $20Kless loan payoff $285KNet proceeds $95KThen, you would subtract the down payment and the other cash you've invested.

Net operating income is the income before subtracting the mortgage payment.Good luck.Bill

When you own an investment property, the deduction is based on the improvements portion of your purchase price (ie: subtract the value of the land from purchase price).  

Then and there I thought that if I subtracted how much I would spend to fix the house the house was affordable.