It would be prudent to determine your NOI and the gross rent multiplier of the area to ensure that change will actually result in a significantly increased valuation. 

I take the price of the property and multiply by 23% (20% down 3% closing costs) and add any repair costs I expect to that, getting my expected cash outlay. 

I calculated my mortgage payments for 285K and they are 1530 with a 5% interest rate for 30 years assuming I dont give a downpayment. 1530 multiplied by 12 gives me a total of 18360 for my years mortgage.

Many people will also base it off of the 1% rule or Gross rent multiplier.

Multiply your nightly rate x 2 x 52. 

Given his situation, if he is good, with the right partner that $20K could have some hefty multipliers.

Making sure I understand, I would take my added up rent $2,200 and multiply by 23% 2,200 x .23= 506 a month towards, Vacancy 8%-$41 Repairs 5%-$25Capex 10% - $51(which is the roof, Furnace, water heater, floor, kitchen and bath appliances).

I just ran across a seller who took May through August then multiplied that total by three to come up with their “projected earnings” for the year.

Anyone that add, subtract, multiply and divide, read questions and answers and play chess can pass the test, IMO.

Multiply the result by 100 to get the percentage value.As an example, if a property is valued at $10,000 and the loan amount is $9,000 the LTV ratio would be 0.9 or 90%, with the borrower only having 10% equity in the property.