It costs about $150/sf here to build new on the conservative side.

Tread lightly, be careful and make sure your ARV and rehab costs are conservative.

That may be more in reserves than a lot of people want to keep, but I like to be conservative on that kind of stuff. 

Stay conservative to keep you from getting into hot water down the road.

Appraisers hired by bank are trained to be ultra conservative to protect the banks interest.

You should also account for vacancy, a good rule of thumb is to use a conservative number of 8% (30 days out of 365)3. 

If you use that money to invest in a property, you can be very conservative and run it as if you're paying the max rate the HELOC may rise to - if the deal still works, then no need to worry!

So as you know already 70% of the conservative appraisal of 450k is only 315k ( about 45 k less than you owe taking into account that you have paid the mortgage for the past year).

It was listed at $175,500 and had ARV conservatively at $260k.

When they told me how much they wanted, I felt they were a little optimistic with their asking price and their estimated rehab budget, but after a few rounds of negotiating over text, we agreed on a price that was $15k under their original asking.The numbers were:Purchase price: 80kseller repair estimate: 35kARV: 180k to 195kMy hard money lender would only lend up to 65% of the ARV and they chose to go with a conservative number at $175k, so based the 65% rule I had to be all in at $117, so that gave me a budget of $37k.