We are grossing over $500,000 a year in rental income using that formula - and netting well over $200,000 a year from real estate after the expenses to buy and maintain the properties.  

The formula we use to calculate ROI is as follows:ROI = ((Income - DebtService - ManagementFee - Insurance - RETax - PeriodicFees) x (1 - StateTax)) / ( DownPayment + ClosingCosts + RehabCost)While there could be dramatic differences in factors like maintenance, vacancy rates and such, I will keep it simple and only show the impact of variations in state income tax, property tax and insurance.Below are details on the example property I will use:• Purchase price $150,000• Rent: $1,000/Mo. or $12,000/Yr.• Financing: 20% down, 4.5% interest, 30 year term.

This method is a good formula to quickly vet a deal, but not foolproof. 

. - How many units are you looking for and what formula are you trying to achieve.  

@Robert Sims, @Nick Colamarino, @Rolanda EldridgeThis article attests to the my point about GURUs using the same formula https://www.biggerpockets.com/renewsblog/2011/04/04/real-estate-guru-scam-trap/

Is there a formula I can follow, so that I can make the proper adjustments when making an offer?

Looks like your formula is wrong.

Also, I'm still waiting on approval from my lender, which might have some very important mortgage and interest rate information I'm unable to apply to the formula. 

There is also a complex sustainability formula for 3-4 unit properties.  

In a nutshell, you charge your tenants for water based on a set formula.