I live in the land of South Florida where the worlds most shady contractors congregate.In the past 5 years, I've lost in excess of $50,000 to thieving builders and handymen.

Now bear in mind, the excess cash flow will NOT be able to be credited to your  income.  

Great rental area where you can pick up a 3/1 for $35-$45k and get rents in excess of $800.

More than 4x seems a bit excessive for a rental criteria.

However we are objectively near the end of an economic cycle where easy borrowing and excess liquidity has driven the prices of many things to near limits.

We're funding in excess of $35mm a month in short-term, construction loans, so we're doing something right.As for the idea that some construction manager builds your rehab schedule is false.

For a rental property business, they include taxes, insurance, management, maintenance, advertising, office supplies, entity maintenance, legal fees, evictions, setout fees, damage done by tenants (in excess of the security deposit), lawsuits, capital expenses (not technically an operating expense), etc, etc, etc (I could go on and on).Cash flow for rentals is determined by subtracting the operating expenses and the debt service from the gross rents.The NUMBER 1 reason that newbies fail is that they don't understand operating expenses and therefore have a negative cash flow.Let's look at a few things that were said in the previous posts:so I am taking the monthly rent, cut it in half (50%) and then subtract my monthly insurance and tax bill and am now using that as my "Misc" monthly expense.

"In the management of Your Property(ies) some amounts may be paid by a tenant or prospective tenant, pursuant to the lease agreement or tenant application, which will be retained by Us as further compensation for Our services, such as late fees, notice fees, non-refundable deposits, administrative fees, municipal service fees in excess of taxes paid, etc."

When you pay the property off you can use the excess proceeds to fund your next deal.

However, I don't see how it is even debatable that the agent has to add value in excess of either his or her commission or 2X his or her commission in some cases.