Then subtract expected income tax rate.

Someone that makes 3x the rent, and meets all criterias is likely going to keep there job, or atleast be able to weather their own storm.I think tenants that make 3 X to qualify for a 700 dollar renter will not have reserves.. tahts 2100 a month before tax's subtract 700 for rent  150 for utls.. etc that leaves them maybe 1k a month to buy food cloths insurance car if they have it etc..

Even worse during the 2008 crash with property values dropping, many people were underwater, so the property subtracted from net worth.

Now if you say525k (subtract) transaction costs to purchase (subtract) transaction costs to sell (subtract) interest, condo fees, taxes, insurance, utilities during the period you lived in it (subtract) any maintenance and other fees the rent hasn't covered during the years it has been rented. 

Then subtract $75k for the rehab fi. and I'm left with $327k for the house purchase, not the $450k I put in the calculator...Either way, it looks like it doesn't work.

   * SFR Assumptions:      - Insurance/mo: $50     - Taxes/mo: $150     - Property Mgmt/mo @10%: $100 (this is dependent of mgmt company and services provided)     - Vacancy/mo @ 5%: $50 (this is dependent on the neighborhood and price)     - Cap Ex/mo @ 10%: $100 (this is dependent on the age and condition of property)     ## $450.00/mo in owner expense     - all utilities paid by tenant     ** $1,000 - $50 - 150 - 100 - 50 - 100 = $550.00/mo (available for desired profit and debt service [paying loan])2) Now that I know how much I am working with for NOI target and paying a mortgage, I subtract my desired profit per month. 

If you live in the adu, I would meter the adu with a water meter and subtract the usage from the city bill. 

I am understanding it as subtracting that from the amount I would normally give them? 

Figure out the ARV, multiply by 70%, then subtract the cost of repairs to get your maximum purchase price. 

When I subtracted monthly expenses from monthly income the cash flow amount was different from what was stated on the report.