Dan has laid out the high level formula, now just fill in the pieces and ask questions when you get stuck along the way.

Followed by:"I suppose you got this one for a song..."

At least that is the formula we use in SoCal.

With these costs, I will then use a formula (for example.

Property Cost $200,000.00 Repairs Needed $50,000.00 Number Of Units 10 AVG Rent Per Unit $475.00 Gross Schedule Income $4,750.00 Vacancy Allowance 10% $475.00 Gross Operating Income $4,275.00 Less Operating Expenses Accounting $25.00 0.58% Advertising 0.00% Insurance $125.00 2.92% Lawn / Snow $- 0.00% Repairs $85.50 2.00% **Since i guess high for repairs, i lowered this down to 2% Monthly Taxes $458.33 10.72% *** Renter pays Utilities Electric $- 0.00% Gas $- 0.00% Fuel Oil $- 0.00% Water / waste $- 0.00% Total Operating Expense $693.83 16.23% Net Operating Income $- 0.00% Property Cost With Repairs $250,000.00 25% Down $62,500.00 Additional Cash Down $- Remaining Balance $187,500.00 Gross Operating Income $4,275.00 Monthly Mortgage $1,875.00 Total Operating Expense $693.83 Monthly Profit $1,706.17 36% profit My formula always shoots higher on the cost to protect me.

Alot of the gurus act like you can effortlessly rake in piles of cash, using their secret formulas :roll: but in reality it takes time and especially persistence to make it big.

Third, is there a quick formula that you use for determining purchase price on a rehab?

If you have that number you would be able to determine your maximum price.Use the following formula:[After Repair Value (ARV) x 70%] – Repairs = Maximum PriceIn a slow or declining market you may want to multiply the ARV by 60-65%. 8)

Sounds like your strategy is fix-and-flip, so those formulas apply.

Do realtors use a specific formula to determine the exact value of a home, and/or what it should rent for?