You can guess based on last year and add or subtract any changes, but that too comes with issues.

Yes, I know to subtract the expenses from the gross rent, as my calculators have me do so, but my original question still remains - do reno/upgrade costs count against cash flow when calculated at the time of purchase but executed during the first 6 months of ownership?

This means you subtract your total capital losses from your total capital gains.

Like any trade, you need to get a few quotes, ask what they specialize in, and see if you are a good fit. 3.As far as location, it doesn't really matter, the IRS is nationwide and from there states add or subtract their rules. 4.

Now subtract 20%.

So, to make a profit you have to subtract 8% for sales, and whatever renovation costs and any carrying costs.

This means that the property's annual net operating income (NOI) must be at least 1.25 times greater than its annual debt service.Calculate the property's NOI: To calculate the property's NOI, subtract all operating expenses (such as property taxes, insurance, and maintenance) from the property's gross income.

Please help me to understand my calculations.This is an example:Comps on a property = $250,000 (ARV)Owner originally got a loan for $200,000Owner has paid $80,000 on loan so far ($80,000 equity)Owner has an outstanding loan balance (or mortgage) of $120,000 ($200,000-$80,000)Owner is asking for the loan balance of $120,000 + $15,000, for a total of $135,000 (asking price)So, if I have an ARV of $250,000, and I subtract the following (to get MAO):$3,750   >   Acquisition costs (1.5% of ARV)$17,500  >   Sales costs (7% of ARV)$10,000   >   Holding costs (4% of ARV)$20,000   >   Profit (I want to make on flip)$33,000   >   Repairs (based on $15 per sq ft on a 2,200 sq ft property)$3,300   >   Hedge (10% of Repairs)= $162,450 MAO (Maximum Allowable Offer)Then, do I take this amount and subtract the $120,000 mortgage (loan) = $42,450, and then subtract out the $15,000 that the owner would like to have, leaving an additional $27,450 for profit?

Find out what other similar properties in the immediate area are selling for and estimate an ARV (after repaired value)Multiply that times 70% Subtract guesstimated repair costs = most that you should offer (max that you ought to be willing to pay)Scrub (eliminate) the ones that are corporate or bank owned (you are not going to out- negotiate them).Just start talking to the owner(s), ask lots of questions, find a common ground and be patient.

Positive CF subtracts from it.