Treat it as a flip, so subtract repairs then multiply by 70%"?

A good tool to utilize is excel, you can evaluate a cash flow in minutes.Monthly payment is =PMT(intrate,term,principle) it would look like=PMT(5%/12,180,100000) This is $100,000 at 5% term of 15 years.Then place your estimated occupancy rate, insurance, taxes, an allotment for improvements down the road into a pivot table to automatically subtract.

Dividing that by a purchase price of 150,000 would be a cap rate of 8.4%.You can argue finer points of the calculation (I didn't subtract 5% or 10% for vacancy for example, and 50% isn't good if landlord is paying utilities, doesn't account for differences in property tax rates in various cities/towns, etc.).But I think the thing is that you're dividing gross income by purchase price when you should be dividing NET income (NOI) to get the cap rate.

There may be some slight changes since the official counts come out after all certificates are paid.Number of liens sold to investors:2016 - 1,880 (1,600 bought by investors - 280 Struck to County as no bidders)2015 - 2,039 (1,808 bought by investors - because 231 struck to county as no bidders)2014 - 2,5752013 - 2,382Total dollar of liens sold:2016 - $1,874,010.88  ( $1,694,277.89 bought by investors and $179,732.99 not sold)2015 - $2,678,533.35 ($2,336,551.03 bought by investors - $341,982.32 not sold)2014 - $3,015,871.872013 - $3,435,014.32Average rate of return overall:2016 - 6.28% (5.25% by investors when subtracting out struck to county liens which all get 16%)2015 - 6.75% (5.40% by investors when subtracting out struck to county liens which all get 16%)2014 - 5.86%2013 - 6.55%Number of Investors who won liens:2016 - 742015 - 89 2014 - 1162013 - 201Total Number of bids for all liens:2016 - 8,8232015 - 10,5252014 - 18,8122013 - 99,073,789You bid down the interest rate in 1% increments from 16% down to 0%.

This is especially important so that we could suggest additional expenses that you may have overlooked or maybe even say for this type of property you do not need to include this or that.Your analysis should look similar to thisGross Income    25500 (2125*12)Operating Expenses  (you still need this number)Net Operating Income (NOI)  you get this number by subtracting Operating Expenses from Gross                                                           Income.To get your operating expense number add up the following  TaxesElectricWater & SewerTrash PickupLawn care and/or snow removal Gas / oil / propaneVacancy (use 5-7% of gross income)Maintenance (10% of gross income)InsuranceHome owners Association Fee (HOA) You may or may not have this oneI like to include a 5% misc expense ( i use this as a reserve)You may be paying all of these or just some.

Simply take the rent subtract these factors and see if the remainder meets your profit target. 

Take 50% of the rent for nonmortgage expenses ($1300) then subtract the mortage and what you have left over is cash flow...in this case you're in the red.

When coming up with ARV for a property, how much is typical to subtract if the subject property does not have a pool but the comps do have a pool?

Hi everyone - I listened to a great podcast and the guy being interviewed was talking about how he will make offers on portfolio deals at a discounted price and then get the seller to indicate the value of each one, subtracting the price from the total portfolio price, until he gets down to a (low) price for the one property he really wanted.   

Take the anticipated rental income, subtract all expenses, and what is left over is yours to keep.