@Calus GlispieYou cannot always go with those assumptions.

I made an assumption from your OP that the owner paid off the 1st mortgage since you said that no banks were involved.

There is something about the real estate investing industry that lends itself to the mistaken assumption that investing is something other than a real business. 

I am looking into getting my first flip property soon.I was wondering if I should have my contractor walk a few properties with me before I get a property under contract or if I should have the deal first based on my own rehab assumptions? 

The back-up plan is to simply flip the property and take the cash out now for the next project.The Project (2 unit Multi-Family):Acquisition/rehabLand Acquisition:     275k (I'd use my cash to buy)Hard Money Loan:  100k (I might use my home equity line at 4% APR over 20)ARV:                           465k (This is my best assumption based on other comps)Refinance:                348,650Cash out:                  26,250Income:Rent:                         1800x2 (This is conservative)Capex/Maint.          300x2Expenses:                400 (water/trash/electric/sewage/insurance)Using these numbers the property looks like it generates a COC return of about 30% per anum (on the 26k outstanding).

In my region, rents actually did NOT decrease during that time, but I still build in an assumption that they would decline in lockstep with the pricing to err on the side of caution.

It also allows me to change assumptions on the fly. 

I am hoping that the readers of this post will just try to understand that Negative Cash Flows are just numbers you put into a Calculation and that you should put more emphasis on the Assumptions and the Results.

Pick different potentials in the same investment market...run the numbers before and have a list of what you need to know or look at, then run the numbers after...depending on the property and intent use one of the calculators on this site for every one...work it as and then use the tool to calculate what it would need to be  --  if they are the same then it might be the right deal.Once you have this then you can move to other surrounding markets easier...just make sure you adjust your assumptions to align with that market.One final note and this depends on your area, here in FL you have to account for what your property taxes "will be" not what they are. 

A mobile phone app is key so you have persistent access no matter where you are.Total operating cost (coverage, cost of exports, cost to acquire additional contact or transaction history data) factoring in assumptions in overall marketing effort and volume.