Do you include rehab costs in COC returns?

[Amir Navabpour]

I typically view the rehab cost as a separate bucket as my downpayment. For COC I typically look at how much I put down, and then divide my net returns against that downpayment. I don't include the rehab costs as I typically view that as in the "equity bucket," in the sense that those dollars increased equity value or at least built a turn key product with little to no equity. If I included my typical rehab costs as part of my COC returns everything could be negative. Just curious if this is standard, or are any of you able to create positive cash flow within 2 years with rehab budgets over 15-30k?