Simply put, we start off with the As Repaired/Completed Value (ARV), then subtract from that number a reasonable profit, the rehab cost (scope of work), which we've gotten good at, a contingency reserve for any "unexpecteds", our cost of capital/carrying costs (interest and costs of the leverage used), and our costs/fees on the buy and sell sides of a flip.

I use all the rental cash flow to pay these loans off asap, then repeat.

$6k tax.Ins,hoa, not to mention utilities . took out a HELOC off of our personal home ( res.worth $900k, and a 260sq ft studio, mtr. $1450 mo.) for$ 220,000 for the deposit.

I look every day for off market houses to flip.

It's way easier when you have a turnover.My wife could manage this and she's hands off with the tenants. 

Loans are approved based off of the rental income of the property.

Until robots can actually go to the property, go inside and see it, touch it, smell it etc. there will be risk of estimates being way off and losing money as an investor if you rely on an app.

Paid off the first 4 years later.

.- at year 7 if value appreciated a lot, can i do a HELOC on it and use that HELOC to pay off the balloon - probably not due to lien being secondary etc on helocYes on the HELOC, but it would probably be easier just to refi and pay off the seller, and cash out more money too.Hope that helps and good luck!

Good morning everyone, I had some general questions on which idea would be better to start off.