It’s proximity to the Orlando attractions equates to a lot of interest in bookings.

We then subtract $40k for reno (because it will more than likely run on the high end of your estimate), bringing us to $57.5k, which is below the initial offer they received from a realtor and since you don't want to work your butt off for $5k, you ultimately need to offer them less than every other offer they've already turned down.Long story short, really focus in on your estimates throughout the equation and prepare to move on when you can't make a competitive offer. 

Rents are generally the biggest and easiest as it is always easier to bring in an additional dollar of revenue than it is to reduce a dollar of expenses - both impact net operating income which equates to an increase in value.

Why are you not subtracting the rehab costs in your final equation.

If anything use the cap rate as an inverse equation and run a 9 or 10 cap and write an offer at that amount.Best of luck!

The BOI is a built-up cap rate based on typical financing for that asset (5% interest, 20-year amortization/term, 75% loan-to-value, which equates to a mortgage/debt constant of 7.92%) in the case of the numbers within the analysis. 

Your partner would be bringing the capital, net worth, loan experience and risk capital, and this would equate to the other 75%.Something to consider - if you can co-sign on the loan without weighing down the possibility of getting the loan or dragging down the terms, you will move closer to getting your your multifamily "loan experience," or "loan card."

I was thinking of raising to 3,600 which equates to 3%. 

There are some variables in the equation that are personal to you, especially if you are in a position where your return is labor intensive.

Especially in this market.Most investors are going to have some equation they use to price residential investment property, for example, I pay 60X gross rents for rent ready properties in C+ or better neighborhoods.