I would only underwrite based on actual rents not proforma.

@Ilir Livadhi I think you are referring to property wholessalers telling you how much the rehab will be - and as you see, their numbers are often not based on reality.

Jump in!

Are you both friends and have unique skill sets and are breaking up the duties of investing based on those skills?

Without a firm base and working familiarity with these three areas the investor will not have the knowledge to analyze, negotiate and close advantageous real estate transactions. 2- Experience - the first few deals are likely to be smaller, harder, with more “surprises” and not as profitable as the investor imagined.

. $360k equity (based on your estimated loan balance and estimated transaction costs if you sold, this is not calculating capital gains taxes but that would reduce your equity down to about $310k if you sold without doing a 1031 exchange). $8k cash flow (this will increase over time because you are in an appreciation market). $6k principal pay down (based on your current loan). $20k appreciation (based on 3% which is conservative, 4-5% is the historical average).

Quote from @Dennis Bragg: Hey Josh, thanks for jumping in with such a bold approach.. it’s not every day you see someone your age pushing for a luxury twist on a single family rental.

Lets jump right it!

I'm also concerned older homes have already seen their biggest jump in capital appreciation and don't have as much potential for price growth compared to newer homes.What are your thoughts on older homes?

Apparently, local jurisdictions here are saying they want more affordable housing, but in the same sentence will also say that there will be more regulations, more environmental protections, and more hoops to jump through to develop starter homes.