The problem with your initial formula is that the appreciation rate fluctuates wildly in the SD market.
At the last bottom of the market (~96) properties could be purchased with 10% down and rented out for about break-even cash flow. The 8-12x factor that powayseller pointed out, depends on interest rates. With high rates (e.g. 10-12%) then you would expect around 8x rent to make it cash flow.
With low rates (e.g. 6-7%) wou would expect around 12x to make it cash flow.
