The reason to do this is to get a base line so you'll have something to compare against when creating a deal with the seller.One path to explore is to see what her sales price is (if it's fair and agreeable) then subtract that amount from her balance on her mortgage and that would be her gross equity.

Subtract four points and you get $77,280 from the loan.

Alex Rental Income 2015 41316.00 Subtract Vacancy 5% 39250.20 RENTS 2015.00 910.00 873.00 860.00 800.00 Expenses Property Insurance 1834.00 Taxes 3350.00 Total Insurance/Taxes 5184.00 Legal Legal Fees 120.96 Evictions 177.19 Permits 344.00 Total Legal 642.15 Maintenance Labor 1650.00 Appliances 250.00 Lawn & Snow 307.50 Materials 1570.00 Pest Control 400.00 Total Maintenance 4177.50 Utilities Gas/Electric 1860.00 Trash Disposal 1184.00 Water & Sewer 2006.03 Total Utilities 5050.03 Total Expenses 15053.68 Principal 1410 PMI 212 Mortgage Payment 1622 Cash Flow $394.38 FHA Loan Details 310,000k 10k seller assist (covers closing costs) 3.5% down (10,850) 3.75 interest

At my "day" job, our insurance covers multiple parcels of real estate in different areas (though all in the same metro area), and this would be great for me because it would allow me to just add another unit (or subtract one) from the policy as I acquire/sell properties, be easier for recordkeeping, have one payment per year for all insurance, etc.

I have been told sometimes that I can add my rental income to my total income to help qualify for a new property, which helps somewhat.I have ALSO been told that I can subtract my rental income from my monthly mortgage expenses, more like a business.

So, to calculate your cash flow, you basically subtract the mortgage payment from 1/2 of the gross rent.

The Net Sale Price is computed by taking your Gross Sale Price and subtracting your routine “permissible selling expenses.”

Subtract lawyer fees, other expenses, etc. which total 15k.

I would then subtract that budget from the REO asking price and that's what I'd consider offering...but do you're homework.

Even with the cost of insurance subtracted, you're still looking at about $6k/year.