Everyone has their own formula but most of them come back to the MAO (Max Allowable Offer) formula.

Let's look at the two main types of end buyers: fix-and-flippers and buy-and-holders.To make money as a fix-and-flip, most end buyers use some version of this formula: Max Allowable Offer = 70% of ARV minus Repairs.

They have a set formula that they stick to and you either meet it or you don't.re: 150k bidAs far as your bid though, I would definitely put that in.

If you think this is really worth $500K fixed up, and it needs $50K in work, this formula tells you that you can pay $300K.

To calculate the future buying power, use the formula: FV = (1 + r)^n / (1 + R)^n where:r is the rate of increaseR is the rate of decrease (inflation)n is the number of years into the futureInflation-adjusted (buying power) rent at:5 years: $1,000 x (1 + 2%)^5 / (1 + 4%)^5 ≈ $9077 years: $1,000 x (1 + 2%)^7 / (1 + 4%)^7 ≈ $87310 years: $1,000 x (1 + 2%)^10 / (1 + 4%)^10 ≈ $824Because inflation is outpacing rent growth, your buying power continuously declines.

Michael Lush also calls it replacing your mortgage.It may not be the right formula for everyone but it's definitely worth looking in to before making a decision.Happy Investing...P.S.- The method is working for me!

What formula do YOU use when trying to calculate cash flow ?

Your property tax would go up when you go from homestead to non homestead so you'd have to cacl that into your formula.

Then,  I formulate the formula for getting a offer on the house.

With this formula, you would need to send out 100 or so mailers just to get one call.