Wrong.We have to subtract land value first, because land cannot be depreciated.

I add the expenses for the year and the mortgage paid for the year and subtract that number from rental income.

Really appreciate you sharing the numbers example — do you usually subtract rehab after applying the 60% rule, or bake rehab assumptions into the discount upfront?

There's a better way to do this, without connecting the lease and the option together.Agree on the final option price, then subtract the total would be credits from that price. 

Before you buy a property, figure out what it would sell for 6 months from now, all fixed up, subtract cost of sales, taxes, carrying costs, time, concessions, contractors who don't show and so on.

The service fee shift will lead to inflated revenue supported on sites like AirDNA since those did not account for the guest service fee added on top.IE on a $1000 booking previously Airbnb would charge the guest $1140 ($1000 + $140 service fee), and AirDNA would report $1000.Now the host has to market up the amount to $1150, and then Airbnb's fee is subtracted.

It's also important to note that UBIT is calculated only on the income propionate to the % financed and subtracting the first $1000 and deducting expenses and depreciation so usually in a syndication (for example) because of cost seg there's no profit to report for the first 2ish years so no UBIT right away.

A stress free property is hard to find.I would not consider selling the property while the tenants are there.Whether you need to 1031 depends on what your living standards are and what income you will make at retirement.If you gross $3,200 a month, you still will likely continue paying repairs, insurance, taxes, etcYou likely won't be paying interest or principal.3,200 x 12 = $38,400Assuming 3% annual inflation, that amount increases to $47,000 after 7 years.You can subtract your expenses from this amount to see what you will net.If you are an tech employee making a nice salary, you hopefully saved money in a taxable brokerage account or a retirement account.

Current vs market NOIValuing a rent upside building is not “future NOI at the same cap rate.”A buyer usually does something like:Use a stabilized market NOIApply a cap rate that reflects stabilized operationsThen subtract the cost and risk to get there (unit turns, time, vacancy, leasing costs, concessions, delinquency, evictions, and the reality of Cook County taxes)In practice, your “market” valuation number is an upper bound, not an as is price.2) Cap rate assumption is probably the bigger issue than the formulaHenry is right on this conceptually.

That yields about $733/month above the mortgage from the $2,100 rent.Once you subtract the $470/month of operating expenses and reserves, the actual cash flow is about $260/month.Lets assume that the property was acquired for an all-in cost of 190,000 including closing costs.