@Betty Cruz - Thanks for your insight.I re-ran my numbers and used tax amounts based on the tax rate multiplied by the price I'm offering, and the projected ARV after I do some renovations.

Maybe a price per square foot or some sort of factor I can multiply by the difference in square footage.

The yearly cash flow is just the monthly multiplied by 12.

Either the appraiser will do this for you OR if there are existing lease agreements, those can give you the value.Then you must multiply the fair market value of all rents by 0.75.

If you are looking for cash flow then Pittsburgh is a great place to be because the gross rent multiplier is pretty low.

I just finished Avery Carl's book on Short Term investing and see the Gross Rent Multiplier formula as well as the Cash-on-Cash return formula.

So, minimize leverage by paying cash, reduce risk by fixing & stabilizing the property, then add leverage to multiply positive returns once your risk profile comes down.

The really, really rough (never use this on your tax returns... but it is a good way to impress your friends at cocktail parties) is to just take 3% of the purchase price to estimate your gross depreciation for the year.Then--and this is controversial since I am mixing pre-tax and post-tax returns--multiply your gross depreciation by your effective tax rate.

I don't think there is "most likely scenario".Each note has its own history, behavior and performance.All of the scenarios you mentioned can happen and I run into all of them during the years I am investing in notes, and note status can change on daily basis (a borrower that is working, healthy or married today might change status tomorrow).The tip I can give you is that when you are doing due diligence prior of investing, you should take worst case scenarios and check what will be your profit in such scenarios.If you are well protected and have multiply exit strategies, you will be able to earn even in such scenarios, and of course earn much more in more optimal scenarios.I can tell you 3 things about the note you mentioned - - I like it is a medium term note (13.75 years, not the 20 or 30 years note)- The LTV is very good, so you have good protection here- I think I have read somewhere that statistically there is a higher chance that a note that have once been non-performing will become non-performing again in the future (not sure if this is correct).Good luck,Eran

Now this needs some explanation.Monthly Rent:  I get an idea of what the monthly rent should be by going to sites like rentometer..6: I multiply the monthly rent by 60% to take out 40% for the following: 10% vacancy, 10% property management, 10% maintenance, 10% property tax and insurance.