After this thread my goals are to keep the properties at a 30 year am and save my cash, conservatively purchasing other multi family deals that meet my parameters until my loan lines are maxed (in this market this could take years).

Based on my research as well as what my friends pay to live in the area, I think conservative numbers for what I could get in rent after bringing the place into the 21st century are $800 and $1200 plus $200 for the garage, a total of $2,200 a month.

If I run the numbers ultra-conservatively, assuming all garages are vacant with no income from them, the property would make about $350 cash flow monthly with 5.5% cash on cash and 6.5% cap rate (I know, not impressive).

Conservative calculations put the CAP rate at 8.5% with C on C of 19%.

It has a $16.90 Cash on Cash return and could increase my cash flow $373 on the conservative side.My question is, how do I split the profits with a private lender?

It is an older property so I was trying to be conservative on the maintenance.

Based on my experience, they tend to be a little conservative on the appraisal.

Being a credit Union they are very conservative, but both my wife and I used them to purchase houses, which we still own today.I would not write off the VA either because even if you go over your entitlement you can still get in for a low down payment.

These are also conservative projections (if they're not conservative, I'd say to avoid investing with that Sponsor), with good Sponsors often exceeding them.

The industry term for this is “dealer property” there is a great deal of case law on the issue as to what you should be considering in performing this analysis.If the property is treated as inventory, the gain is ordinary income, not capital gain.A conservative approach is to hold the property 2-years post completion to treat it as a capital asset.You should speak to your tax advisor on this issue as it is a complex analysis.