All the guys out there selling $3995 courses to teach the 'secret' of making a Billion dollars with Sub2 deals will not give you an honest evaluation of the strategy - nor will I.

Check out the #AskBP podcast episode #88: how to use the 50% rule when evaluating rental properties.

Especially when evaluating gross income and cash flow?

Every deal has to be evaluated according to the terms presented.

I would like to try to put together an option to purchase the property as is, of course after doing all the proper due diligence. ( I suspect that much of the electrical and plumbing is shot...lots of work to bring it up, but it could be a beautiful place) Can anyone point me to a basic investor formula to evaluate a reasonable offer for this type of property as is, and determine what the percentage and length of an option should be?  

I was just evaluating my bids for next weeks tax sale in Baltimore.

Well run, your NOI should be about 38.6kAssuming 4.125%/20 yr loan @ 1272 paymentsBack of the napkin numbers suggests a cash flow of 1945/moBUT TO YOUR EVALUATION with real expenses and financing

Currently evaluating SF properties to buy/hold.  

For an income property, you need to evaluate the cash flow and not the comps.Does the property rent for $725 a side right now, or is that "pro forma market rent?"

I hope I have given enough information to get an evaluation of the deal.