If you live in the adu, I would meter the adu with a water meter and subtract the usage from the city bill. 

   * SFR Assumptions:      - Insurance/mo: $50     - Taxes/mo: $150     - Property Mgmt/mo @10%: $100 (this is dependent of mgmt company and services provided)     - Vacancy/mo @ 5%: $50 (this is dependent on the neighborhood and price)     - Cap Ex/mo @ 10%: $100 (this is dependent on the age and condition of property)     ## $450.00/mo in owner expense     - all utilities paid by tenant     ** $1,000 - $50 - 150 - 100 - 50 - 100 = $550.00/mo (available for desired profit and debt service [paying loan])2) Now that I know how much I am working with for NOI target and paying a mortgage, I subtract my desired profit per month. 

After everything, I'd end up with a permanent loan of about $194,000 with P&I payments around $1280.Rent: $2800Expenses: $1120 (40%, assuming I manage it myself)NOI: $1680Payment: $1280Cash flow: $400If you want to wholesale it, subtract your fee off my price.

I would subtract all due expenses, moving/set up expenses from banks asking price for starters.

A more realistic estimate of the cash flow is 50% of the rent (not laundry, that's a separate business) then subtract the P&I.

Figure out the ARV, multiply by 70%, then subtract the cost of repairs to get your maximum purchase price. 

For me personally, I subtract things before I add them.

It appears the formula for calculating the > than 50% rule, subtracts the hours on short term rentals (or rather adds them to the w2 hours) in the calculation.

Now if you say525k (subtract) transaction costs to purchase (subtract) transaction costs to sell (subtract) interest, condo fees, taxes, insurance, utilities during the period you lived in it (subtract) any maintenance and other fees the rent hasn't covered during the years it has been rented. 

Principal and interest are subtracted afterward as the debt service.