Don't guess.2 - Subtract all the cash you get back over your first year.  

If you talk to her and say, "You know, I think it's probably worth $175K after it's all fixed up, I think it will take me $60K with with all the known and unknown work, plus 6 months of my own time (@$4k/mo), interest on the loan, insurance, permits, etc etc, so subtracting that from the final value, I can offer about $50-60K." 

It was a matter of subtraction and rerouting.

Beyond making more money on the SF houses over unfurnished rents, it depends how much more you make for your time (after subtracting all your hard costs of course).

Well then you take the $900 and multiply it by 12 to give you a year's total income and then subtract your yearly fees from that which is generally about 35%  (10%-Management, 5%-Maintenance, 5%-Vacancy, 15%- Insurance & Taxes.).

It's why for every unit we rent, we gain an additional $52.38 per month on top of rent, compared to our competitors who get nothing, or subtracting from their rent in transaction cost.

In other words, take the AVR times .7, and then subtract the repair costs, and this should be the most that you should pay for the properties.

So your tax deferral might be very small on that 15K or so gain, and you get to reduce that gain by costs you incurred over that year, and then subtract the QI fee to see what you are "saving" but really deferring.

I calculated the cap rate by adding all the monthly income and subtracting it by all the monthly expenses (not including mortgage payment).

The best way I can see an answer to this is to use an amortization calculator to see what's left on the mortgage after 5 years and then take that number and subtract it from the 600k you listed.