You would need to subtract that from that 12k a year since you won't be able to write off any interest going forward.  

I would assume so, but it's best to check with the lender to see how they interpret official FHA guidelines which read:"Net Self-Sufficiency Rental Income is calculated by using the Appraiser’s estimate of fair market rent from all units, including the unit the Borrower chooses for occupancy, and subtracting the greater of the Appraiser’s estimate for vacancies and maintenance, or 25 percent of the fair market rent."

The land contract note amount will be the balance owed after the above credits have been subtracted.

You take all the revenue of the property (the rents) and subtract all the known and projected expenses. 

From that I’ll subtract CAPEX (2% on new builds, 5% on older) and leverage costs so I can get down to a pre-tax cash flow.  

To calculate effective rent, subtract the HOA fee from rent and then add back the value of the things that it covers for the property owner, like siding, windows, roof etc.

Because after I subtract everything my offer is typically 50-60% which obviously isn’t the most enticing.

This is evaluating my hard work finding scarce deals and putting equal value to it.The way I see it, I had a lot more risk than the flipper would have.A flipper CAN do due diligence, find out an accurate ARV, and even subtract 10, 20, 30K from the ARV just to be sure, and calculate quite accurately what the minimum profit will be he will be making.He can then say yes or no to said deal, and no big deal.Me as the wholesaler have no such luxury.

Thomas, perhaps there are some policies that work as you described, however I have personally seen whole bunch of policies that work as follow:1) If you have outstanding loan it will be subtracted from death benefits2) If you pass away the insurance company only pay out death benefits and keeps the cash value. 

A DSCR is arrived at after subtracting PITI & a realistic operating expense not a percentage.