That number divided by 12 months ($85) is the actual out of pocket per month after expenses when subtracted from the owners original $1225.

One of the biggest misconceptions I witness time and time again with investors is regarding their ROE (Return On Equity).For example, if you acquired one of your SFH for $100,000 and paid all cash (Mortgage Free) and we subtracted your expenses at $2,000 from gross rents of $12,000, you would have a NOI of $10,000. 

If you beside to keep the rehab property, you have to add rental management fees, insurance, taxes and maintenance expenses into account, subtract from rental income, then assess what is rate of return (CAP rate) you are getting on your money.

@Jonathan Hudak you have to make some assumptions in order to analyze your options.If you assume average appreciation for the area on the home over a 10 year period, trend the rents at historic levels, add the principle pay down, add the tax write offs, add then subtract the capital gains and depreciation recapture….Does that outweigh the return you might receive on $100k invested in an index fund at 8%?

If you typically pay a wholesaler $5,000 for a deal but you spend 20 hours sourcing that deal yourself (Bandit signs, driving for dollars, etc), be sure to subtract that much out of your investment profitHere's how I do it.  

If you are starting out at an avg of only $300/month with no debt, adding debt, and subtracting that from your 300/m cf now, may not get you anywhere.You may need to take a step back, before you can take a giant leap forward, by selling some/most/all of your current rentals (gradually, but not slowly) to access the $1.3M as cash...then use it to flip in order to double your cash.  

I've always wonder how much tax should I estimate to subtract after a flip ?

So, if the comp has one less bathroom, add say 5K to the comp's value.CBS--if the COMP is BETTER, SUBTRACT for what is better.

I ask why and he stated that when the tenants were late on their rent he subtracted the late fees out of their deposit.

Should I include vacancy and maintenance in the monthly expense and subtract it from the cash flow, or keep the cash flow at the higher number (keeping escrow's for the vacancy/repair) when calculating ROI?