I think the pole is 2-3 feet behind the ridge and with your formula I think I would need to go 6 or so to get the 2:1

@Corby Goade I am looking at a 70% formula with a wholesale fee in mind.

Since you posted this in the BRRRR forum this is the formula I use to determine the bottom of my range:75% of ARV - Closing Costs of Refinance - Cost of remodel - Closing Costs of Purchase - Carrying Costs - Buffer for Negotiating + Expected cash flow for 8 monthsI add 8 months of expected cash flow because it makes sense to me to view an individual BRRRR deal through the lens of a 1-year period.

Or maybe his bank has a more strict formula for qualification.

I think you're doing the right thing by seeking legal assistance, I believe there is a formula they follow and should let you know if you fall within that threshold to take that case on or not (I did this for a North Bergen multifamily i bought back in 2019, unfortunately it wasn't successful lol). 

Originally posted by @David Song:@Samuel Eddinger This is not new.

@Dale Hanson the formula for cap rate doesn't change across asset class.

Brandon is talking about the formulas... he says NOI / Property Value = Cap Rate (which is absolutely correct)… and then he says it can be rewritten as….Property Value = NOI / Cap Rate (which also appears to be correct) But then he says you can also write it asNOI = Cape Rate / Property value … which doesn’t make sense to me.. shouldn’t it be..NOI = Cap Rate x Property Value instead??

@Troy DeLong The grand total loan will be determined based on a couple different formulas -- the Lender will take the lesser of the two figures. 1. 75% of the ARV ($200K x .75) = $150KOR2. 80% of the Purchase Price + Rehab Cost ($146K + 40K x .80) = $148KIn this example, the grand total loan amount allotted would be $148K (lesser of the two).The Lender would set aside your rehab budget in a 3rd party Escrow account, amounting to around $30K.

What’s a formula y’all have to get realistic rehab cost?