Important: Always evaluate properties based on cash flow after subtracting the tenant pool segment cost.Once we identified our target segment (the Permanent segment), the next task was to determine three important segment characteristics: rent range, needs, and location.

That means for every dollar you have in equity, you have $1.60 in PV.Sell the property, use the equity as a 20% DP on another property (or more), and you'll have a ratio of 1 to 5...meaning for every dollar of equity, you would have $5 in PV...or in this case it would be (if you subtract $15k for closing costs) a PV of $500k...not $185k.Make sure the new property/properties are all CF positive.

After you have a good idea of what the property should be worth ARV then subtract a guesstimate of any rehab cost based off whatever info you know about the property.

I know that the 50% rule states that 50% of your rental income will go towards your expenses and then you would subtract your mortgage to find out what your monthly cash flow would be (if thats not correct, please feel free to correct me).

Subtract the expenses from the rent. 

The latter number must be subtracted from $5,340,000 for married couples or individuals if they want to figure out how much inheritance tax will need to be paid by their heirs.

Subtract from that the purchase price, closing costs, cost of repair, utilities and expenses and you will have your number.

You'll still pay tax but you will get to subtract the basis from the lot. 

Multiple that by .75     Subtract cost of the renovation from that.  

The $2500/mo rent may get you $500/cf...however, the 25% service fee the listing company charges will cost you $625...the results in negative CF.Adding (actually subtracting) to the problem is the financing...you NEVER use Hard Money as your financing for rentals.