Quantify how much return you are looking for in the short term (cash flow) and in the long term (appreciation) and how much risk you are willing to take to achieve these returns.

How does someone quantify and evaluate the risk involved with this kind of opportunity?

.#5 Practice, Practice, PracticeWalkthrough potential rehab properties (or find properties virtually online) and practice creating detailed scopes of work, quantifying repairs and estimating rehab costs for the projects.

But governments lack creativity, instead favoring quantifiable and uniformly applied standards, and given our affinity to currency it's no surprise that the default yardstick to measure how much you know would be how much money you have. 

Is there a way to quantify the risk?  

Whether it does or doesn't, and I can't put a quantifiable number on it, but logic tells me that it absolutely works.

I always advise new people to really quantify their goals.

This allows them to see how the property will perform if/when they move out, and it helps quantify how much benefit they are getting by living in the property for "free".

An investor makes decisions on how much a property cashflows, where is it located, vacancy rates, and all of the demographics of the area in mind, but it never invests with appreciation in mind as it's simply impossible to quantify it.

My main question is how to quantify the amount of compensation I should ask the owners for.