I am getting a Cap Rate of 4.2% (anything wrong with these formulas?).

Do not use that formula.

You had a $20k capital gain on the land that will be spread over the life of the note (using the IRS pro rata formula).  

My formula is as follows: if it meets your intrinsic value criteria, your offer should not be more than relative value.  

Every note is different and every investor is different, it is hard to have a set formula for note buying quotes.Seller financing can be offered with the sale whether the property is free and clear or not.

So I have a hypothetical situation:Lets say a properties ARV is $550k,Repairs are $75k,And Wholesale Fee is $10k.Using the mao formula:$550,000*80%-Repairs-Wholesale Fee = MAO of $355kWhen I am making my offer price to the homeowner, how do I include any liens, mortgages, and/or money owed?

Ill give you a hypothetical scenario: Lets say the ARV of a house is $350,000,$ needed for repairs is $35,000,and my wholesale fee is $10,000.The formula I use in NJ is going to be ARV*80%-Repairs-Wholesale Fee = Max Allowable Offer (MAO).

That sounds like it has a good formula in place.

They possess - or at least pitch - a formula that can generate that outcome.I get that.

You will want to purchase the home at a discounted price with the formula below:After repair value (ARV) * 70% - repairs - closing costs.