This about about choosing which specific area of a particular metro area in which to invest.Beyond that, I'd also like to know if anyone uses any particular tools or formulas to evaluate neighborhoods before starting to look for specific properties.So:1.

Hi guys,Was wondering if you could check my Cap Rate & Cash on Cash Formula?

First, I don't understand how equity fits into forming an offer, specifically using this formula I got from a "guru" for buying/rehab/selling subject-to:Property MUST HAVE at least 30% equity.

The small town I live in right beside my primary area is more upscale, the cheapest I could ever fine a house here would be $200k+, as much as I would love to have a rental here (extremely high demand because of school district), it just wouldn't cash flow,,It's always tempting because of high appreciation here,,but it just doesn't make sense,,so I continue with $100-$120k houses "next door" and the formula works great.For me to get 2% I would have to go in more 'war zones' and that doesn't fit in my model either.andy

I remember the first one worked out to 72% of market value but can't remember the math formula.

(I'm assuming there is a formula). 

Good comps are nearly irrefutable so if you have good comps and a decent lender to negotiate value using appraisers formulas for determining value you can almost always get the appraiser to come up or meet you near where "value," should be.This is where the science of appraisal meets the arts of persuasion. 

Each investor has a different formula.

Our formula was Annual Net Cash Flow (maintenance, taxes, insurance, P&I mortgage pymts) / Down Payment + Closing Costs (money out of pocket).

@El Madera the lot rent should be $310 based on the Frank & Dave (MH university) formula. 110*310*12*0.7*10=2.864m However, it is very generic number.