It is a widely abused metric (because it is so easy to calculate) that does not convey any meaningful information except to determine the margin of safety i.e. spread between unleveraged returns (cap rate) and interest rate on financing.On to your question JThere is no one way to “quickly” factor in the rehab costs.

Also, remember that you *can* identify more than three properties (if you really feel like three isn't enough choice or you have a ton of value you'd like to spread around between multiple replacement props) but you have to follow two rules:1.

Your family member could also provide the financing on it and make money every month with a positive cash flow spread between the debt and the rent collected or be like a guarantee person that is the main backer for the long term loan your Bank or other lender that  owns that property with a long term loan with that property  on a security  loan until that loan is paid off.Not saying the fix up budget makes this decision fairly difficult but i would say to not have a house that needs over $5,000 on the "make ready" expense to make a 20% gross return giving a cost price and sales price you gave on your example.What you could do to find a deal is pretty limitless. 

You need to take a look at the spread (the difference between the interest-rate you would pay to pull the money out, and the rate you would be hoping to earn from investing).  

Loan origination fee will be added to this.. if not they are making a yeild spread premium is how they are getting paid.a loan company cannot stay in business unless they make 3 to 5k per file.. not possible. over head would kill themif its a bank direct then thats different

I was able to connect with 5 buyers from BP and they were able to spread the word and get my deal noticed.  

Assuming your credit is decent, and you own the property outright or there is a decent amount of spread, a hard money lender may refinance 80% of original purchase price as cash out to assist with the funds required to finish rehab.

It's also makes them more money and helps to spread their income out over the life of the loan balance. 

That 800k of value (including 600k or more of equity) can be spread around to multiple props.

@David Robertson The spread sheet is amazing.