Pretty simple actually - 150 a month x 12 = 1,800. 1,800 divided by 135,000 = 1.33% return on equity.

All you need to do is look at the actual amount of cash the property will leave you with at the end of the year after all of your bills are paid, and divide that by every actual dollar you’ll need in order to invest in something (and I mean everything - closing costs, repairs in order to get it rent ready, down payment, home inspection, etc.).

Here is what I think it is using:ROI equals projected annual net income divided by total cost.My total cost calculation is downpayment plus closing cost plus rehab cost.

I would do whatever would produce me more money.So do the formula ARV-immediate repairs*70= Asking price.Take your asking price and minus the sellers asking price(how much you would get if you wholesaled it)Compare that number to how much you would make if you decided to flip the home.Thats how I would go about doing itSample:Take the comps( 3 homes within .6 miles from your potential home that resemble you potential home in BD BA and SQFT)130k 101 west yellow st150k 222 blue ave140k 254 orange rdSay those three fit the criteriaAdd them up and divide by 3That is your ARVfor the sample the ARV=140kThen have a contractor come look at the property to determine what repairs need to be done to the home say that your repairs needed are 7,900 kTake your numbers 140k-7,900*.7=92,400 92,400 is the max that your offer could be.Say the seller wants 60k your wholesale fee could be 32k-clsoing cost ectOn the other hand what if you want to fix and flip it.

I'm new to the game and just completed sub-dividing our primary residence in Bedford NH. 

@Iftear NaserHere is an explanation of the self sufficiency rule;The maximum mortgage amount for 3-4 unit properties is limited, so that the ratio of the monthly mortgage payment, divided by the monthly net rental income does not exceed 100%, regardless of the occupancy status.

Just be sure to be very, very clear in the agreement and have a professional (attorney) draw up the docs.

Then that needs to be approved and you'll have to deal with inspections and draws -it can be quite complicated for your first time. 

That said, as a landlord, you can certainly draw a line in the sand and cross that bridge when you get there.

If you know the potential rent that a property can get, divide this by the number of rooms.