I can tell you there is no magic formula for that.

But for me, the newer homes have a lot less repairs and very little turnover so the 50% rule just seems to be way off for using as a formula.

Having purchased and rehabbed hurricane houses here in Texas, we look at flood zoning as part of the purchase formula.

All they cared about was 1% and that the house had an attached garage.For the last few, they seem to have some complex formulas.

The formula is: Value = NOI/cap rateBear in mind that most investors need the following: 8% cap rate minimum12% cash on cash return (COCR) 1.6 debt service coverage ratio (net income/annual debt payments) if they are going to finance purchase.

This is why I use the 70% formula to protect any downside to the projections.

Are there any new things to think about beyond quoting financial formulas (favoring leverage, of course), and talking about "sleeping better an night" (favoring cash buying, of course).

This method adds a step to the often quoted $100/door return method because you are telling the formula what your required return is and it is giving you a price, rather than the other way around.

If that figure is $250k or $200k is fine with me, I just need to know so I can proceed accordingly.I will take the formula provided by John Mireles to make that determination and decide whether its worth pursuing or not.

You build in contingency money for worst case examples and then arrive at your price for the property going in.The small retail building you would need to look at ( age of the building, who would go in there for the highest rent and it is mom and pop or corporate, is the building best demolished and build new, is the land better used assembled with adjacent properties, etc.)As you can see it's not just a simple formula but a careful and detailed analysis goes into looking at every property individually.Same thing with a apartment building.