The bank doesn't take rental income into the equation at all.

You are on your way, and it sounds like you have the equation figure out - congrats!

In the strategic sense...lower return deals in the initial stages could reduce my compounding into other deals in the future and crush me later.In a separate topic, I was calculating the effect of a 1% fee on my 401K and found that over 30 years...that equates to 30% lower returns in the end. 

But getting over the emotional part of the equation is an adjustment.

Only complete income number is for rent, but if I have a one time payment or something that is not recurring how do i add that in, or are you saying that is something i should not add into the equation.

Once you figure out the risk side of the equation and what you're comfortable with, then you want to maximize your return by investing in assets that return more than your cost of debt.Also keep in mind that money is fungible. 

The cost per square foot is a bit higher now with brand new development, usually around $250/square foot, but if you’re building 2000 square feet from scratch at a sale price of $400,000, you’ve got a potentially great deal.The other part of this equation that I’ve left out so far is this: land prices haven’t caught up with the crazy housing prices.

Next goal will be to generate passive income that would equate to $13,000 per month or roughly $156,000 per year.

@Jannah Manansala, Take what you know out of the equation. 

Or you can look into RUBS where the utilities are billed based on an equation that figures how much should be allocated to each tenant.